Home Foreclosure, And How to Avoid It – Part 2

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“Underwater” Mortgages

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Many homeowners in today’s housing market have experienced a marked reduction in the value of their home. Have a look through these programs if this is your concern.

  • HARP: (Home Affordable Refinance Program). If you are current on your mortgage payments but, because the value of your home has reduced you’ve been unable to refinance, you might be eligible to refinance your mortgage through HARP. This program has been created to assist homeowners refinance into affordable and more stable mortgages.
  • PRA: (Principal Reduction Alternative). The PRA program was created to assist homeowners whose homes are now worth much less than they owe, by encouraging investors and loan servicers to reduce the amount owing on your home.
  • FHA2LP: (FHA Second Lien Program). If you currently have a second mortgage on your home and the servicer of your initial mortgage (on the same home) agrees to become involved in FHA Short Refinance, you might be eligible to either eliminate or reduce your second mortgage through FHA2LP. If your second mortgage servicer agrees to participate, the total amount of your mortgage debt is not allowed to exceed $115% of the current value of your home.

Unemployed Homeowners’ Assistance

  • UP: (Home Affordable Unemployment Program). If you’re unemployed and finding it difficult to meet your mortgage repayments you might be eligible for UP. UP can provide either a temporary reduction or suspension of mortgage repayments for up to 12 months whilst you’re seeking employment.
  • FHA Special Forbearance: If you’re struggling with mortgage payments because you’re unemployed with no other income source, you might be eligible for FHA’s Special Forbearance. Loan servicers are now required by FHA to extend the forbearance period, by reducing or suspending mortgage payments for up to 12 months for borrowers who qualify for this program.

Managed Exit for Borrowers

  • HAFA: (Home Affordable Foreclosure Alternatives). If you have a mortgage payment that’s become unaffordable and you’d like to change to more affordable housing, you might be eligible for a deed-in-lieu of foreclosure or short sale through HAFA.
  • Redemption: This is the period following the sale of your home at a foreclosure sale when you can still legally reclaim your home. You are still required to pay the outstanding mortgage balance plus all costs incurred during the foreclosure process.

Communicate with Your Lender

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If you’re having trouble meeting your mortgage repayments, we strongly suggest you contact your loan servicer or lender directly. Ask about options that might be available to prevent foreclosure on your home. If it’s become difficult to communicate with your servicer or mortgage lender regarding your need for mortgage relief, there are organizations out there for just this purpose – to contact servicers and lenders on your behalf.

Remember that George Russo and Associates are here to assist with any matters pertaining to real estate law, including home foreclosures. If you’re unsure of your rights, or perhaps you have documentation to sign and you’re unsure of the ramifications, please don’t hesitate to get in touch with us. We’re a professional, experienced real estate law firm, handling all matters pertaining to real estate law in Queens, Brooklyn and New York City, and we’re here to help you. We also offer obligation-free advice, so you’ve got nothing to lose! 

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