Mortgage Relief Military Hardship Resources
by Eric in Germany
Ask Kate about mortgage relief and military hardship resources: Homeowners in the military face unique hardships. But special resources are available to reduce underwater mortgage struggles. Resources include HARP 2 refinance, HAMP loan modification, repayment plans, forbearance plans, dedicated military homeowner help lines, and HAFA foreclosure alternatives.
Yet Eric's credit union's idea of relief from crushing mortgage payments is to give up on the condominium by short sale or deed-in-lieu of foreclosure. Service members will learn here how to access additional hardship resources.
Eric asks Kate for Military Mortgage Relief Options
Hi Kate, My wife owns a condominium in Laurel, Maryland (prior principal residence) with two Navy Federal Credit Union (NFCU) equity lines and loans.
The loans are current, however the payments are crushing. The total balance is $110,000 and the monthly payments are $1380.
She submitted a NFCU Making Home Affordable package requesting a refinance of the two loans. NFCU replied offer only HAFA or Deed in lieu of foreclosure. Unsure if the equity line or loans are associated with Fannie Mae or Freddie Mac.
She is in need of HARP refinance. We are stationed in Germany.
Kate Answers: Military Hardship Resource Options
Let's see if I can breakdown military hardship resource options.
Follow each of the links to other pages on my website that will explain the programs in more depth.
By learning your options, you can call back the credit union and see if you can engage them in a meaningful dialog. You may find they have more to offer than initially disclosed.
But your first step is to find out if your mortgage is backed by Fannie Mae or Freddie Mac
Fannie Mae Military Mortgage Relief
If you discover the mortgage is owned by Fannie Mae, you can shop any mortgage lender who participates in the HARP 2 refinance plan
with no loan-to-value restrictions. But chances are that mortgage rates and fees will be based on a non-owner-occupied status meaning increased cost to you.
Military hardship assistance may be available if you have Permanent Change of Station orders, are in or just leaving active duty, or you (or your spouse) have an active duty injury.
Fannie Mae's military hardship programs are executed by your lender and include repayment plans and forbearance plans, in addition to Home Affordable Foreclosure Alternatives (HAFA)
or example Short Sale
, Deed-for-Lease, Deed-in-Lieu, and more.
Repayment plans spread out past-due payments over several months until the mortgage is brought current. They are made on top of current house payments. Forbearance plans temporarily suspend or reduce mortgage payments for the term of active duty and an additional 3 months or longer.
Here's the icing on the cake! During the forbearance period, no late mortgage payment notices will be sent to the credit companies.
If your mortgage is owned by Fannie, call 877-MIL-4566 and tell them you are in the military.
Freddie Mac Military Mortgage Relief
Freddie Mac provides similar homeowner resources to military service members with a hardship. For example, a Permanent Change of Station is considered a hardship.
During active duty and one year afterward, homeowners with a hardship may be eligible for interest rate relief which caps mortgage rates at 6%.
For at least nine months after being released from active duty, loan servicers cannot initiate or resume foreclosure proceedings on eligible service members.
Freddie Mac’s dedicated help line for homeowners in the military is 1-800-FREDDIE, choose option 2, and then 3.
Making Home Affordable Military Mortgage Relief
Whether or not your mortgage is owned by Freddie Mac or Fannie Mae, you may be eligible for the Home Affordable Modification Program, HAMP
There's even more icing on the cake! Relocated military homeowners may still qualify as owner-occupants, which means better mortgage terms than a non-owner-occupied property would receive.
Your lender may have programs similar to Fannie and Freddie. So now that you have educated yourself on current military hardship resources, ask your lender about each one.
If you aren't confident that the mortgage contact at the credit union understands available options, ask to speak with another representative.
Good luck and best wishes,
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