Foreclosure Intervention and Default Counseling
- The Making Home Affordable programs offer several alternatives to homeowners who want to avoid a foreclosure. The counselor can help you determine if you qualify for help through Making Home Affordable. These programs provide loan modifications, refinances and forbearance plans to homeowners who have experienced a financial hardship. The Home Affordable Foreclosure Alternatives program helps homeowners obtain approval to sell their homes with negative equity. The homeowner is given $3,000 in relocation expenses as an incentive to sell his property.
- In February 2010, the Department of Treasury allocated funding to states that had 20 percent declines in home values and unstable unemployment rates. A housing counselor can help you determine if you live in one of the states that received Hardest Hit Funding. These programs help homeowners obtain mortgage subsidy payments, principal reductions and transition assistance for those who have had to sell their home. To qualify for help, you must be low-to-moderate income and the home must be your primary place of residence.
- HUD provided additional funding to homeowners in states that did not receive money from the Department of Treasury. This program provides homeowners who have experienced a 15 percent decrease in income with a declining-balance loan for up to $50,000. To qualify for an emergency loan, the homeowner's income cannot exceed 120 percent of the area median income. The loan can be used to pay for payments in arrears, insurance, taxes and other mortgage expenses. There is no payment required on the loan for five years. After that time period, the emergency loan balance declines 20 percent on an annual basis.
- Service members who are given relocation orders and need to sell a home with negative equity may qualify for reimbursement. The Homeowners' Assistance Program provides the difference between the fair market value of the home at the time of purchase, including any improvements made on the property, and the selling price. To qualify for the reimbursement, the home must have been purchased before June 30, 2006, and the home's value must have declined 10 percent.