Houses for Sale in San Diego Shares How San Diego Homeowners Can Avoid Foreclosure with New HAMP and FHA Options for Homeowner Assistance
Mar 30th, 2010 by Kathleen Behrens
Houses for Sale in San Diego is pleased to report on March 26, 2010 the Obama administration announced a new relief plan to address our nation’s foreclosure crisis. This is welcome news for San Diego homeowners who have been experiencing financial challenges and are at risk of losing their San Diego homes to foreclosure.
Although the Making Home Affordable program was initially designed to provide financial assistance to distressed homeowners, less than 200,000 borrowers have benefited from receiving permanent loan modifications. Rising unemployment rates and declining home values have made it impossible for many homeowners to refinance their loans or qualify for government relief programs.
The new enhancements to the Home Affordable Modification Program (HAMP) and the Federal Housing Administration (FHA) refinance program have been developed to assist unemployed homeowners and borrowers with underwater mortgages, who owe more on their loans than their homes are worth. It is estimated 25%, or 1 out of 4, borrowers has an underwater mortgage. These homeowners are considered at high risk for default because they cannot qualify to refinance their loans or sell their homes for what they owe.
In San Diego County, nearly 10 percent of mortgage holders were delinquent in their payments by 60 days or more in the fourth quarter. It is estimated nationwide almost 7 million borrowers are considered dangerously delinquent on their home loans and are at high risk of losing their homes to foreclosure. The disproportionate numbers of homeowners in San Diego and across the nation who are in distress and require financial assistance represent a serious threat to the stability of not only the local San Diego housing market and economy, but our national economic stability as well.
The enhancements will be implemented over the next six months, and all aspects are expected to be fully operational by fall 2010. Partial funds from the $50 billion which was allocated for housing programs as part of the Troubled Asset Relief Program (TARP) will be used to support the revisions.
If you are a San Diego homeowner who is current on your existing mortgage and you owe more on your loan than your home is worth, you may qualify for the FHA Refinance Option. The benefits include a reduced principal amount of at least 10 percent of the original first mortgage and a reduced monthly payment based on current, low interest rates. To be eligible, your San Diego home must be your primary residence, and you must meet certain income and credit score requirements. However, this program is voluntary regarding lender participation. Contact your lender to find out if this program is an option for you.
The FHA is also providing financial incentives to lenders for principal write downs to modify second mortgages. If you are a San Diego homeowner with two mortgages and are struggling financially, contact your lender to inquire about this option. The federal government has just doubled how much it pays lenders who help modify second mortgages by reducing the principal amount of San Diego home loans. Even if you have previously spoken with your lender regarding financial assistance, it may be in your best interest to ask again now that the government has increased the financial benefits for lenders. A reduced principal amount owed on your San Diego home loan will lower your monthly payments for both principal and interest saving you thousands of dollars over the life of your home loan.
If you are a San Diego homeowner who is currently unemployed, you may qualify to receive temporary financial assistance on your San Diego home loan under one of the new enhancements to HAMP. For 3 to 6 months your mortgage payment may be reduced to 31 percent or less of your monthly income. If you meet the HAMP eligibility requirements and your loan servicer participates in HAMP, your servicer is required to offer financial assistance. Call your lender or visit the Making Home Affordable website to review the eligibility criteria.
An additional improvement to HAMP includes providing financial incentives for principal write downs for HAMP eligible borrowers who are underwater on their San Diego home loans. If you owe more than 115% of what your San Diego home is currently worth, you may qualify to have the principal amount on your home loan modified.
Another option which may be possible for San Diego homeowners, who are underwater on their San Diego home loans, is principal reduction. If you are current on your payments and remain so for 3 years, you may qualify for forbearance and a portion of your loan may be forgiven. Contact your lender if this situation may apply to you.
If you are a San Diego homeowner who has already received a permanent home loan modification through HAMP or you are currently participating in a trial modification, you may qualify to have a portion of your principal loan balance retroactively forgiven based on the new revisions.
For San Diego homeowners in the most dire of financial circumstances, HAMP has provisions which will benefit you as well. Financial incentives are being provided to lenders who cooperate during the short sale process to help San Diego homeowners who do not qualify for government relief programs avoid losing their San Diego homes to foreclosure. The benefits include payoffs to subordinate lien holders who often prevent short sales from occurring by refusing to negotiate and funds for relocation assistance for San Diego homeowners who successfully complete a foreclosure alternative.
Hopefully the new enhancements will provide greater assistance and relief to San Diego homeowners who are experiencing financial difficulties and facing the threat of losing their San Diego homes to foreclosure. If you need help, the first step is to contact your lender to find out which programs may applicable for you.
If you decide that a short sale is the right option for you and would like the assistance of a real estate professional, contact San Diego Realtor and Broker Russ Petrone of Petrone Properties Real Estate Associates at 858-259-1000 or russ@petroneproperties.com. With 25 years of experience in the real estate market, Russ has the knowledge and expertise to help you get the highest value for your San Diego home.
[...] San Diego homeowners at risk of losing their homes to foreclosure have new options for financial assistance under the Home Affordable Modification Procedure (HAMP) and Federal Housing Administration (FHA) provisions added on March 26, 2010. The new options which may help San Diego homeowners avoid losing their homes to foreclosure include Loan Principal Reduction, Reduced Loan Payments, Reduced Interest Rates, Forbearance, Loan Forgiveness, Loan Modifications, Lien Payoffs, & More! For more details visit Houses for Sale in San Diego to read the article entitled Houses for Sale in San Diego Shares How San Diego Homeowners Can Avoid Foreclosure with New HAMP and…. [...]
[...] New provisions were added to the Making Home Affordable program on March 26, 2010. These enhancements have been designed to provide financial assistance to San Diego homeowners who did not previously qualify to receive benefits under the original version of the program. The new provisions specifically address San Diego homeowners who are unemployed or have underwater mortgages. Your mortgage is referred to as underwater if you owe more on your loan than your home is currently worth. To learn more about the new enhancements and how they may help you, read the article entitled Houses for Sale in San Diego Shares How San Diego Homeowners Can Avoid Foreclosure with New HAMP and…. [...]
[...] New improvements to HAMP were announced by the Obama administration on March 26, 2010. Part of the program enhancements include specific provisions to more effectively address the needs of San Diego homeowners who may benefit from HAFA. The new provisions provide increased financial incentives to encourage lenders to further assist homeowners who do not qualify for loan modifications and additional funds to payoff subordinate lien holders. The amount of relocation assistance for borrowers who successfully complete a foreclosure alternative has also doubled. To learn more about how the new, expanded provisions of HAMP may help San Diego homeowners, read the article entitled Houses for Sale in San Diego Shares How San Diego Homeowners Can Avoid Foreclosure with New HAMP and…. [...]
[...] The new additions to the Making Home Affordable program have been specifically designed to assist unemployed homeowners and homeowners who owe more on their mortgages than their homes are currently worth. To learn about how the new Making Home Affordable provisions for distressed homeowners may help you, read the article entitled Houses for Sale in San Diego Shares How San Diego Homeowners Can Avoid Foreclosure with New HAMP and…. [...]