Mortgage Assistance 101: The Complete Guide to Saving Your Home

Posted on Nov 10 2014 - 6:58am by admin

As of 2014, the US economy is still struggling, people are having problems paying their mortgage, and foreclosures are all still common. We’ve put together one of the most comprehensive ‘Help My With My Mortgage’ guides on the web with quite a few specifics.

This guide applies specifically to ALL people: senior citizens, families, single mothers, single fathers, etc. We will in the future have a specific look at mortgage help for single mothers, but for now this guide will answer those questions.

Ok, the good news first.

There are various programs, both government-backed (federal, state, and local) and private organizations, that can provide mortgage assistance to you, if you are one of the many struggling to pay your mortgage or in danger (or currently in) foreclosure.

Even as we near 2015, and the US has made an economic recovery (since 2008), there are more than a few people out there who haven’t seen it and are still struggling. Look at Detroit, for example, the whole city is one big foreclosed ghost town!

Categories of Home Loan / Mortgage Assistance

We break down assistance programs into the following:

  • State Mortgage Assistance Programs– home loan assistance at the state level
  • Foreclosure Assistance Programs– assistance targeting defaulted mortgages facing foreclosure (also read our detailed guide on preventing foreclosure)
  • Property Tax Assistance Programs – assistance with property tax savings
  • Mortgage Assistance from Banks – mortgage assistance from lenders and banks
  • Federal Mortgage Assistance Programs– programs offered by Federal Government that assist with mortgage troubles
  • Mortgage Assistance for Veterans – mortgage help for military personal (active and retired)
  • Non Profit Organizations Offering Assistance – organizations that offer home loan assistance
  • Unemployed Mortgage Assistance – mortgage assistance targeting the unemployed

Now, the assistance varies from state to state but in some cases the assistance programs can directly pay your mortgage for a short time, refinance your mortgage rate, provide access to new (lower interest) mortgages through some type of loan medication, enable reduced monthly payments, or even forestall foreclosure for a short period, etc.

Even if you don’t qualify for direct mortgage payment assistance, there are programs that will help mediate a loan modification of sorts to help reduce your monthly payments so you can keep your house.

So if you are struggling with your mortgage, you should absolutely look to see what services are out there, both at the government and private level that can help you keep your house.

Let’s look at what sort of mortgage assistance is available in the US right now as of 2014.

 

Available Mortgage Assistance Programs 2014-2015

 

Federal Government Mortgage Assistance

At the federal level of government, a number of assistance programs have been put into place since 2008 to help troubled homeowners keep their homes.  Most of the programs deal with loan modification of sorts. Basically, mortgage loans are renegotiated with the variables modified somewhat. This could mean lower interest rates, lower payments, etc. It offers a way for struggling homeowners to keep their houses while also keeping up with payments.

Government-Backed Banking Mortgage Help Programs:

Two of the largest mortgage lenders in the United States, Fannie Mae and Freddie Mac, offer three specific programs for trouble homeowners who can’t make payments. These are ‘federal’ assistance programs because the federal government owns both of these lenders now.

  • Home Affordable Refinance Program (HARP): a federally-backed initiative that allows home owners refinancing options on their mortgage IF your mortgage is greater than the value of your home.
  • FHFA Streamlined Modification Initiative: another mortgage loan modification program by the federal gov that offers homeowners the chance of negotiating a lower interest rate. To qualify, you must have a mortgage with Fannie Mae or Freddie Mac. Unlike some of the other programs, the Streamlined Modification Initiative does not require homeowners to submit income proof.
  • Borrower Help Network: a program (for Freddie Mac borrowers) that offers 1 on 1 personal assistance for mortgage issues.

FHA (Federal Housing Administration) Mortgage Assistance:

The FHA offers a number of assistance programs for mortgage issues. These are government initiatives.

  • Hope for Homeowners: a refinance program offered by FHA which can help you keep your mortgage. The way this works is homeowners who DO NOT HAVE a FHA home loan can refinance their home loan into a FHA home loan, which might have better interest rates and more flexible payment options than your non-FHA loan. You can also qualify for this even if you are delinquent on your payments.
  • FHA Home Affordable Modification Program: a special program by the FHA that pecifically targets homeowners with FHA loans who are in default or currently facing default on their mortgage loan.
  • Home Affordable Unemployment Program: A federal program that targets the recently unemployed. If you have lost your job and can’t make your mortgage payments, the Home Affordable Unemployment Program will for a period of 6 months reduce your mortgage payments allowing you to find a new job (and keep your house while you do so!).

Mortgage Assistance from the State

At the state level, there’s mortgage assistance. That assistance varies, depending on the state and the individual who applies. The assistance offered can be loan modification, mortgage refinancing, mortgage assistance, mediation, free council, and even special programs to postpone or slowdown foreclosures. At the very least, you should be able to gain access to a loan modification program that will help renegotiate the terms of your mortgage to reduce payment amounts, etc. Some of the main state assistance programs are offered by HUD, either directly or through Community Action Agencies which are given federal grants to offer housing help at the state level.

Also see our STATE MORTGAGE ASSISTANCE GUIDE (coming)

Mortgage Assistance from Lenders

We’ve looked at the government assistance for mortgages above, but did you know that banks and mortgage lenders have programs in place to grant temporary relief from mortgage payments to homeowners who are unable to make payments? The idea behind this is to give the homeowner time enough to find a way to continue to make payments and keep their house. This time can be used to modify the loan terms, gain employment, seek financial counselling, etc. Additionally, during this ‘forbearance’ period, foreclosure will not happen which gives you a bit of breathing room to explore all options.

Let’s look at a few of the banks that offer mortgage assistance. The assistance you receive depends on who your mortgage lender is. If it’s one of the following, contact them.

Well Fargo Loan Modification Program – a program with two plans, the ‘Fast Trac’ plan which offer streamlined loan modification to lower mortgage rates and ‘ProjectLifeline’ a program that delays foreclosure for a period of time. These two plans can really make a difference and allow you to keep your home by giving you lower mortgage payments and halting foreclosure so you can explore your options.

Bank of America Foreclosure Prevention – BOA offers homeowners a number of mortgage assistance options to prevent foreclosure. These range from mortgage loan modification, interest rate reduction, short sales, etc.

JP Morgan – Offers several assistance programs. The Homeownership Centers offer customers a 1 on 1 help service if you are going through mortgage troubles. As of now there are a number of loan modifications you can apply for to change your interest rate and payment amounts. There are also some principal deferment options you can select. For a full range of their mortgage assistance services, you need to contact them directly.

Citigroup – like all the major banks, Citigroup have a number of mortgage assistance programs in place to help troubled lenders. The Citi Homeowner Assistance program offers some assistance to homeowners in trouble. The Citi Home Affordable Modification Program allows borrowers to renegotiate the loan terms for reduced payments per month.

Associated Bank – this banking group is now offering a program aimed to help troubled homeowners who are unemployed stay in their homes while they get back on their feet. The program will modify loan terms for lower payments for up to 12 months or even halt payments for a few months.

Fifth Third Bank – features a special program called ‘You Have Options’ which targets struggling homeowners. The program offers loan modification options to help reduce payments.

This is not an exhaustive list of lenders who offer assistance. If you have taken out a mortgage with a different bank/lender, you should contact them directly to find out what special mortgage help programs they offer.

Nonprofit Agency Mortgage Assistance

Besides government mortgage assistance, one can seek help from the private sector, specifically from organizations, nonprofits, and government affiliated agencies that offer varying levels of assistance, from legal advice, financial counselling, loan modification services, and even direct mortgage assistance.

Save the Dream Tour: this is a large scale event that brings together homeowners and banking representatives for one on one communication about mortgage issues. It’s possible for homeowners to renegotiate their mortgages directly with their bank during this event for reduced payments and to directly apply for banking mortgage assistance with their lenders.

Union Plus: an organization that caters to union members. Help may come in the form of cash, grant assistance to assist with mortgage payments, and other such aid. You must be a member of a union or a family member of someone in a union to apply.

Catholic Charities: an organization with locations across the United States that helps troubled home owners with mortgage issues. The issues extent to credit counseling, late mortgage payments, foreclosure issues, etc. If you qualify, the service is free.

 Community Action Agencies: a network of agencies backed by the federal government that offer mortgage and foreclosure assistance to homeowners in need of such. CAA can offer mortgage assistance grants, legal advice, loan modification, mortgage mediation, etc. At the very least, CAA can offer you free advice or referrals on where to get the help you need.

Cherokee Nation: if you are Native American, it’s possible to gain mortgage assistance from the Cherokee Nation itself.

HUD (Department of Housing and Urban Development) Counseling Agencies: the HUD backs many agencies that offer, through grant funding from the HUD, free counseling services for homeowners facing foreclosure or mortgage delinquency.

The NID-Housing Counseling Agency (NID-HCA): an agency that’s backed by the HUD that serves troubled homeowners who face financial difficulty. This agency specializes in foreclosure and mortgage defaults.

Other Mortgage Assistance Categories

 There are also different categories of assistance you can seek out. We’ve broken them down by category. 

Foreclosure Assistance (read our guide)

At federal, state, and local level, there are a number of foreclosure assistance / mediation programs available to you if you are in foreclosure or at risk of such. The level of assistance will vary, but the programs will provide the mortgage holder and the homeowner a means of mediating an agreement to the satisfaction of both parties – with the homeowner getting reduced payments or temporary foreclosure postponement while the lender gets a chance of resumed payments.

We’ve written a highly detailed guide on preventing foreclosures though special mortgage options (usually negotiated via foreclosure mediation).

Property Tax Assistance

This is an interesting form of assistance, one you might not initially think about when it comes to mortgage assistance. The gist of this is that as home values have been declining (in no small part, due to the massive housing crisis of 2008) in many parts of the US the real estate taxes have not adjusted to the lower housing prices. You can essentially challenge the assessed value of your home and (maybe) lower your housing tax rate. This is free to do and is absolutely worth looking at.

Unemployed Mortgage Assistance

If you have lost your job or suffered a reduction in income and now cannot make mortgage payments, there are programs that can provide temporary help.

  •  As discussed, the Home Affordable Unemployment Program by the federal government will give homeowners who have lost their jobs 6 months of reduce mortgage payments while looking for a new job.
  •  The HUD Emergency Homeowners Loan Program will grant a two year interest free loan up to 50k to make loan payments so as to keep their home. It’s basically an interest free loan which you use to pay off your home loan for a 2 year period while getting back on your feet. To qualify you must be three or more months behind on mortgage payments and be currently living in your home.
  •  Hardest Hit Fund is an interesting program because it MAY include money that does not need to be paid back, unlike some of the other aid programs which only give a loan. As such, you might think of this as a ‘grant.’ Of sorts. Like many of the other federal government mortgage assistance programs, the Hardest Hit Fund can be used to mediate loan modifications for reduce payments, lower interest rates, or even direct cash grants to be used to pay off part of the mortgage. The funds are distributed differently from STATE to STATE, so you’ll need to check specifically what your state offers from the Hardest Hit Fund. This fund targets the households that most need the help AND while also being able to actually keep their house and get back on their feet.

Mortgage Assistance for Veterans

Another category of assistance is applicable to VETERANS who served in the military. If you have served in the military and are facing hardship, you should look into these special programs.

  • Military Homeowners Assistance Program (also called HAP) offers free assistance to veterans with mortgage issues. The idea behind this specific program is to use a short sale. Short Sales are usually the last resort if a loan modification deal cannot be reached on a mortgage. The idea is that the lender will agree on getting less than the initial mortgage when the property is sold. The lender has to be convinced they will get more for the property than if it’s foreclosed. The end result is the homeowner walks away with something and the bank walks away with more money than a foreclosure sale would yield.
  • Service Members Civil Relief Act: a special program for military personal who are in danger of losing their home. This act does two things: legally prevents active military personal from losing their homes unless the lender gets a court order and reduces the interest payments on a mortgage while actively in military service.  This basically means the Federal government will protect active military personal from (easily) losing their home while serving in the military.                   

                                    

The Final Word on Mortgage Help

We’ve given a very detailed list of some specific programs you, as an American citizen, may qualify for if you are having problems keeping up with your home loan payments and/or you are possibly facing foreclosure on your home. The key here is to keep an open line of communication WITH your current lender. Don’t let pride get in the way if you find it difficult to meet your mortgage payments — SPEAK WITH YOUR LENDER and ASK about their assistance programs.

You should also spend time researching the options on your own time so you can plan out what to do in advance. Should the worst happen and you lose your house to foreclosure, then you will need to look at Emergency Housing Assistance or some sort of Rent Assistance program (a program that will help you find low cost housing and supplement your payments for a time). We’ve written a complete guide to Rent Assistance Programs in the United States if you need more information about this.