Special Edition Making Home Affordable Options

by Ask Kate

Ask Kate's Special Edition of Making Home Affordable (MHA) Program Overview: Designed to support the U.S. housing crisis, discover 13 options bringing hope to struggling homeowners with underwater mortgages. Additionally, there are other MHA options beyond HARP refinances and HAMP loan modifications for you to learn about.

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For example, there are 2nd mortgage reductions, military hardship resources, Hardest Hit Housing Market Funds, suspended mortgage payments for unemployed, HAFA foreclosure alternatives, $10,000 (increased from $3000) moving assistance and other options.

Several of these MHA programs can be stacked, creating awesome combinations for lowering monthly house payments.

***zz-portrait-right.shtml*** Now onto Ask Kate's Special Edition of the Making Home Affordable Program Overview where you can review each of the 13 MHA options.

Don't forget to follow my links for more details.

Making Home Affordable Refinance for Lower Mortgage Rates

HARP 2.0: Special Edition Making Home Affordable Options
1. Home Affordable Refinance Program HARP - For homeowners with Fannie Mae or Freddie Mac mortgages and who are current on payments but have fallen property values.

2. FHA Short Refinance - FHA refinances with principal reductions for homeowners without FHA (not a typo), Fannie Mae, Freddie Mac, VA, or USDA mortgages and who are current on their payments but have fallen property values.

3. FHA2LP - For homeowners eligible for FHA Short Refinance, to reduce or eliminate an accompanying second mortgage.

Making Home Affordable Modification to Lower Mortgage Payments

1. Home Affordable Modification Program HAMP - Results in a reduced monthly house payment, typically 40 percent.
HAMP Tier 2: Special Edition Making Home Affordable Options


2. Principal Reduction Alternative (PRA) - For homeowners WITHOUT Fannie Mae or Freddie Mac loans to reduce the mortgage balance. More at Why Is There No Principal Reduction Alternative for GSE Mortgage.

April 2016 Update:FHFA Director Mel Watt Approves Principal Reductions for Fannie Mae and Freddie Mac (GSE) mortgages.


3. Second Lien Modification Program (2MP) - For homeowners approved under HAMP, a modification or principal reduction on a second mortgage. More also at HARP and 2nd Mortgage Refinancing.

4. FHA HAMP - Modifications for struggling homeowners with FHA mortgages.

5. VA HAMP and Military Hardship Resources - Modifications for struggling veterans with VA home loans.

6. USDA's RHS - Lowers monthly house payments for struggling homeowners with loans guaranteed by the United States Department of Agriculture.

Making Home Affordable Assistance for Unemployed

1. Hardest Hit Housing Markets (HHF) - $7.6 billion targeted to states hit hardest by the economic crisis.

2. Home Affordable Unemployment Program (HAUP) - While unemployed homeowners look for new employment, mortgage payments can be reduced or suspended for 3 months or more.

Home Affordable Foreclosure Alternatives (HAFA)

Ask Kate empowers homeowners struggling to stay afloat with underwater mortgages.
1. HAFA Short Sale - Up to $10,000 (increased from $3000) in relocation assistance when selling a house for less than the existing financing. Going through HAFA for short sales affords better protection because the homeowner is completely released from the mortgage debt after selling. The deficiency (the difference between what is owed and the sales price) is guaranteed to be waived.

2. HAFA Deed in Lieu of Foreclosure - After an unsuccessful short sale, if the deed is voluntarily transferred to the loan servicer, homeowners can receive up to $10,000 (increased from $3000) in relocation assistance.

Making Home Affordable National Mortgage News

Special Edition Making Home Affordable Mortgage News
Making Home Affordable Program is a work in progress. Don't assume loan originators keep up on program changes.

You need to educate yourself and be prepared with questions. Print this page and refer to it as you interview lenders.

Keep up-to-date by following my Mortgage Blog for MHA news, updates, enhancements, and announcements. I report them as they break.

Whatever you do, don't dilly dally. The Departments of the Treasury and HUD won't offer these loan programs forever.

March 2012 National Mortgage News: FHA Streamline Refinancing

President Obama's announces astonishing decrease in mortgage insurance premiums for FHA Streamline Refinancing Announcement. Although not an official MHA program, it may be a comparable solution for FHA borrowers with underwater mortgages. Check it out because no appraisal is required!

February 2012 National Mortgage News: Obama Refinance Plan

HARP 3: Special Edition Making Home Affordable Options
President Obama spoke about his proposed streamline refinance plan for homeowners who are not eligible to apply for Making Home Affordable HARP refinance at his February 2012 State of the Union Address, Blueprint for an America Built to Last.

See if the program could help you by going to Ask Kate about Obama Refinance Plan.

Ask Kate about MHA

This MHA overview was inspired by an initial letter and subsequent comment from a homeowner named MAK. (More on MAK's first question in a moment.)

Ask Kate about Making Home Affordable Options
MAK, to answer your second question about comparing HARP interest rates and lenders, here is a quote from Making Home Affordable, the government's official site.
"Call your mortgage lender, or any lender approved to do business with Fannie Mae or Freddie Mac, and ask for a Home Affordable Refinance application."
Yes, you can now shop participating HARP lenders!

Want to see MAK's first letter and my response? Go to The Bad Behavior of Making Home Affordable.

Best wishes to distressed homeowners during such stressful times,
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Comments for Special Edition Making Home Affordable Options.

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2nd Mortgages and HARP
by: Anonymous

It's wonderful that we have the ability to refinance our primary residence through this program; however, we also have a 2nd lien. Apparently, there is not a program for refinancing a 2nd lien if you qualify for HARP. Not to be misunderstood with HAMP and 2MP. Any suggestions?

From Kate: Discuss FHA Short Refinance which includes a 2nd mortgage program (FHA2LP) with your mortgage company. Don't automatically exclude yourself because you do not currently have an FHA home loan.

It may be a long shot but ask about the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (HHF) which addresses 2nd mortgages too.

You can read about these in the article above.

Best Wishes, Kate
HARP Lenders on Georgia Refinance
by: George

After being held hostage by my Big-Box Mortgage Lender for 2 years, they recently retracted their false reporting of arrears on my expired ARM mortgage, and told me I could get a mortgage elsewhere. Damaged credit rating not withstanding, I am still eligible for a mortgage.

Last year I was offered a really good deal on a HARP refinance. Then it was retracted for no apparent reason.

This summer, I was offered a HARP mortgage for the same terms and cost they were willing to offer for a conventional mortgage - about $3,000 in costs with a 5 1/4 percent APR on a 30yr Fixed. The conventional was a slightly better deal because I could buy down the rate fairly cheaply.

I was told the lender (another major mortgage company) would and could finance a HARP loan (by Freddie among others), but turned down because the mortgage wasn't theirs.

So - Is there any company offering favorable rates and low/no fees on refinance under the HARP program to non-customers. The property is not upside down, unless you take the Freddie estimate based on a recent foreclosure sale of a badly damaged townhome in my neighborhood. A recent appraisal put the value right at 20 percent above principal owed.

Thanks in advance for any advice or recommendations. George

From Kate: Hi George. You are not the first to tell me about lenders who are unwilling to finance a mortgage under the HARP program when they do not currently own the loan.

First of all, the short answer to your question is elbow grease. To find a company who will finance your HARP loan takes shopping, comparing, time, and effort. I don't know of any shortcuts.

But I do have another thought. If you have credit issues lingering from the erroneous reporting by the first mortgage company, I would try to get that cleared up.

Best wishes, Kate
Facing Foreclosure
by: Paula E. from Louisville, Ky

Hi Kate. Just came across you online. I am recently widowed and in pre-foreclosure with my home mortgage. My lender does not do refinancing and has declined on doing either a deferment or a modification.

There is more owed on my home than what it is worth.

I can't get help through the "making home affordable" program due to the fact that my lender is not participating in the program. I can no longer afford my home and have a question for you. Is there anyway that I can get out of this mortgage without ruining my chances of being able to purchase a more affordable home? I appreciate any advice and guidance that you could provide me with. Thank you. Paula E.

Note from Kate: Hi Paula, I am so sorry to hear of your troubles. Call HUD's hotline as advised by the Making Home Affordable Program. Homeowner's HOPE Hotline at 1-888-995-HOPE.

Scroll back up this page to review the options under the section, Home Affordable Foreclosure Alternatives (HAFA). Then call your loan servicer back. They do not need to participate in Making Home Affordable (MHA) to discuss basic short sale or deed-in-lieu options with you.

While still having an affect on your credit, I think short sale is less traumatic to a homeowner than foreclosure. Go to Short Sale vs Foreclosure for more information.

Best wishes, Kate
Is it possible to refinance a house that is not worth what you paid?
by: Ellicott city, Maryland, USA

Hi Kate, we have been living in our house for almost 6 years. We did not put anything down when we purchased home. My spouse and I pay mortgage insurance, in which we have to pay 20 percent before we could get any Obama plan to help us. We purchased the house for 388,000.00 and now it is worth 323,000.00 Is it possible to refinance a house that is not worth what you paid? David from Ellicott City, Maryland, USA

From Kate: Hi David, Yes, it possible to refinance a house that is worth less than the original purchase price and worth less than is owed on the mortgage. That's what Making Home Affordable is all about.

The Making Home Affordable Program addresses two main areas:

1. Mortgage Refinances - click here to go back up the page to Making Home Affordable Refinance for Lower Mortgage Rates to see the 3 options.

2. Loan Modifications - click here to go back up the page to Making Home Affordable Modification to Lower Mortgage Payments to see the 6 options.

Save this page so you can refer back to it - Special Edition Making Home Affordable Options - and call your loan servicer to review options. Ask which would fit your credit qualifications.

Don't let the fact that you have PMI (private mortgage insurance) keep you from exploring a refinance or modification under Making Home Affordable.

Hope that helps. All the best, Kate

Click here to add your own comment.

You can also ask Kate about your mortgage at Best Mortgage Advice Social Networking Hotline.

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