Modification Plans
 
    Special Forbearance. The homeowner's lender may be able to arrange a repayment plan based on their financial situation and may even provide for a temporary reduction or suspension of their payments. The homeowner may qualify for this if they have recently experienced a reduction in income or an increase in living expenses. They must furnish information to their lender to show that they would be able to meet the requirements of the new payment plan.

    Mortgage Modification. The homeowner may be able to refinance the debt and/or extend the term of their mortgage loan. This may help them catch up by reducing the monthly payments to a more affordable level. They may qualify if they have recovered from a financial problem and can afford the new payment amount.

    Partial Claim. Their lender may be able to work with them to obtain a one-time payment from the FHA-Insurance fund to bring their mortgage current. They may qualify if:

    1. their loan is at least 4 months delinquent but no more than 12 months delinquent;
    2. they are able to begin making full mortgage payments.

    When their lender files a Partial Claim, the U.S. Department of Housing and Urban Development will pay their lender the amount necessary to bring your mortgage current. They must execute a Promissory Note, and a Lien will be placed on their property until the Promissory Note is paid in full.

The Promissory Note is interest-free and is due when they pay off the first mortgage or when they sell the property.

Pre-foreclosure Sale (a.k.a. A Short Sale). This will allow them to avoid foreclosure by selling their property for an amount less than the amount necessary to pay off their mortgage loan. They may qualify if:

    1. the loan is at least 2 months delinquent;
    2. they are able to sell their house within 3 to 5 months; and
    3. a new appraisal (that their lender will obtain) shows that the as is value of their home meets the HUD program guidelines.
Deed-in-lieu of foreclosure. As a last resort, they may be able to voluntarily give back their property to the lender. This won't save their house, but it is not as damaging to their credit rating as a foreclosure.

    They may qualify if:

    1. they are in default and don't qualify for any of the other options;
    2. Their attempts at selling the house before foreclosure were unsuccessful; and
    3. they don't have another FHA mortgage in default.

Principal Reduction. A homeowner may be eligible for this program if they have had medical conditions that have affected their income for a period of time.

Adjustable Rate Mortgage (ARM) to a Fixed Rate. Interest rate reduction is putting ARM into a fixed rate. Any interest rate over 8% is till considered sub prime.

Making Homes Affordable Plan. The homeowner's lender may be able to arrange a repayment plan based on their financial situation and may even provide for a temporary reduction or suspension of their payments. The homeowner may qualify for this if they have recently experienced a reduction in income or an increase in living expenses. They must furnish information to their lender to show that they would be able to meet the requirements of the new payment plan. The Making Homes Affordable Program is part of the Obama Administration's board, comprehensive strategy to get the economy and the housing market back on track. The Making Homes Affordable Programs offers strong options for homeowners:

  1. refinancing mortgage loans though Home Affordable Refinance Program(HARP),
  2. modifying first and second mortgage Loans though the Home Affordable Modification Program(HAMP) and the Second Lien Modification Program (2MP),
  3. providing temporary assistance to unemployed homeowners though the Home Affordable Unemployment Program(UP),
  4. offering other alternatives to foreclosure though the Homes Affordable Foreclosure Alternatives Program(HAFA).