Are you fighting to avoid foreclosure?
If so, this post is for you. After the mortgage crisis and all the other challenges that we have seen in 2008, there are a lot of people who are having a difficult time paying their mortgages. I just found out about a program to help borrowers who need help avoiding foreclosure. It is basically a program put together by the people in the HopeNow group to create new payment plan so that borrowers can avoid foreclosure.
The HopeNow group is an alliance of counselors, mortgage market participants, and mortgage servicers that is working to help as many homeowners as possible avoid foreclosure and stay in their homes. The mortgage industry professionals are coming together on this because, just like the homeowners, they are going through challenging times as well. A foreclosure really is a lose/lose situation. The obvious effect is that the home owner is out of their house, but the bank really doesn’t win in a foreclosure. The bank just wants to get paid each month, and most would much rather avoid the hassle and all the additional costs of a foreclosure. It was for these reasons that the HopeNow group was formed.
What to do if you are facing foreclosure
If you haven’t already, you should call your lender and be honest with them. There are millions of people who are trying to prevent foreclosure – it’s not just you. When dealing with lenders and late payments, the worst thing you can do is nothing. Communication will give them a chance to make a deal with you. Ignoring the phone calls doesn’t give them many options.
The HopeNow group has launched a SMP(Streamlined Modification Plan) that starts on December 15, 2008. The goal is to help borrowers get their mortgage payment below 38% of their gross monthly income. If you need help you can find out more at HopeNow.com or by calling 888-995-HOPE.
Are you eligible for the foreclosure help?
The HopeNow SMP has a few requirements for eligibility…
- You must be at least 90 days late on your mortgage payment.
- You can not be filing bankruptcy.
- You must have a loan to value ratio (LTV) in your home of 90% or more.
- You must live in the house and it must be a single family residence.
If you are not 3 months late on your mortgage payment they will look at your situation on a case-by-case basis.
More information about the foreclosure help program
To find out more about HopeNow’s foreclosure avoidance program you can read more below from HopeNow…
Streamlined Modification Program Fact Sheet
Start Date: December 15, 2008.
Goal of SMP: Help the most at-risk borrowers stay in their homes through a streamlined process to establish an affordable monthly housing payment. The goal is to
reach a monthly housing payment (which includes capitalized past due payments, principal, interest, taxes, insurance and HOA/condo fees) that is no more than 38% of the borrower’s monthly gross household income.How SMP Works: Participating servicers work with eligible qualified borrowers to reach a more affordable mortgage payment through extending the term of the loan, lowering the interest rate, and/or forbearing principal. All outstanding late fees are waived.
Eligible Borrowers: 90 days or more past due on mortgage, can be in foreclosure, must not be in bankruptcy, owns and occupies the property, and the property is a single family residence.
90% or Higher LTV: Borrower’s current loan-to-value ratio must be 90% or higher. The property value will be determined by the servicer, Fannie Mae or Freddie
Mac, depending on ownership of the loan.Mandatory Escrow: Escrows for real estate taxes and homeowners’ insurance must be set up under this program if they are not currently escrowed.
Required Documentation: A hardship statement, verification of monthly gross household income, and a signed modification agreement. The homeowner must make the first payment at the modified terms when he or she submits these documents.
3 Months of Payments: For modification to be complete, borrower must make 3 payments within 90 days at the new modified payment level and be current at day 90.
Counseling Encouraged: Participating servicers and investors encourage borrowers to seek housing counseling at HUD-approved housing counseling agencies. They can receive free counseling by calling the Homeowner’s HOPE Hotline™, 888-995-HOPE or visit www.hud.gov to find a counselor.
Participating Investors: Fannie Mae, Freddie Mac, and majority of HOPE NOW portfolio lenders/servicers.
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{ 6 comments… read them below or add one }
Great information. Unfortunately, I have 3 good friends that need to contact them. Now how to tell them aboiut it without losing their friendships. Pride can be a terrible thing.
that is true… maybe tell them about ChristianPF.com and they can read it?
I am kind of joking, but as I think about it, it could be an easy way to indirectly lead them to the info…
but then again, if they read the comments, they will figure out the plan…
I have a good friend who trying to avoid foreclosure and he has been in contact with this group. Frankly, he felt like he was getting a bit of a runaround, but it is still a good process.
Thanks for posting this Bob.
Bobbi,
Just a thought, but you may want to phrase your help as a question. Something like, ” Would something like information about this program be of interest to you?” There is less chance of offending them this way and it leaves them “in the driver’s seat”.
Remember too that your friends may see your help as freindship and caring, not an invasion of their privacy. What else are friends for ?
@Joshua
thanks for sharing that- I haven’t used them or known anyone who has, so if anyone does get more information about the actual process I would love if you would share with us…
The one thing that bugged me a little bit was that you had to be late 3 months in order to qualify, I feel like that almost works as an incentive to not pay your bill. Personally, if I were in that bad of a situation I would know that I need help before I got to the point of being 3 months late… But, on the other hand, they have to set up some sort of criteria to keep people who are fine from just trying to get a lower pmt…
When will there be help for people trying to avoid eviction?