Availing mortgage assistance programs

by

Ronald Petty

Are you defaulting on your mortgage payments? No need to lose heart, there may be a program for mortgage help that can enable you to keep your home. Given the state of todays economy, affected by a slowdown, an increasing number of homeowners are struggling to keep up with their monthly mortgage liabilities and facing the crisis of foreclosure. As expenses rise, more and more Americans who wish to own a home are finding themselves underwater, or in a state that can best be described as being upside down in mortgage payments, which means owing more on the property than it is worth.

A plethora of programs are on offer for mortgage aid under the expanded Making Home Affordable Act that equip home owners to fulfill their financial commitments, keep their mortgage payments current and shield themselves from foreclosure. For instance, the Federal Housing Administrations (FHA) refinance scheme strives to give responsible homeowners an opportunity to retain their properties even in the condition of being upside down on mortgage payments. These government programs provide homeowners an opportunity to renegotiate their mortgages when they are falling behind in their payments. To tide over the crisis, these property owners can avail a lower rate FHA loan.

Initiatives under the Troubled Asset Relief Program are also aimed at assisting fund-starved homeowners. This government mortgage help plan offers assistance by lowering payments through refinancing and loan modification with fresh government-supported mortgages. This is a better option than a mere lowering of interest rates. The government has various schemes under which loan providers and banks write off a sum of the principal amount due on house loans through these modification initiatives. These initiatives are expected to assist three to four million cash-starved homeowners in the coming years.

There is also the option of debt consolidation under which a homeowner can consolidate several higher interest credit card payments and loans into a single lower payment. Availing these assistance programs does not imply that your debt gets waived, only the payments get more convenient and manageable. For instance, a debt consolidation loan will free up more money to make your mortgage current and enable you to maintain timely payments on it. Before sanctioning these repayment loans for any kind of mortgage help, the companies make it a point to check out a property owners payment history, credit history and ability to pay.

The other options include programs for the refinancing of a mortgage to help a homeowner in reducing monthly payments, getting longer term loans, and modifying mortgage types. Homeowners going in for a mortgage refinancing scheme, however, should be prepared for certain origination charges like processing and application fees. There could, however, also be a discount point that can be used to further reduce interest rates. Several mortgage repayment plans make it possible to redistribute back payments and repay them in loan payments in future. Some firms also provide the facility of Independent Foreclosure Review. If a homeowner has faced a foreclosure during, say, 2009-2010, an Independent Foreclosure Review can be undertaken to ascertain if the foreclosure was legally valid.

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