Alternatives To HARP
Practical Solutions to Stay in Your Home
(2 votes, average: 5.00 out of 5)
Loading ...
There are many alternatives to Harp that will allow you and your lender to maintain a good relationship and prevent the need for foreclosure.
One alternatives To HARP is a regular mortgage refinance. If your mortgage has an adjustable rate that is about to reset to a much higher level, or if your interest rate is simply too high, you could refinance to bring your monthly payments down to an amount that you will be able to meet. The possibilities for a full refinance are greater if you have equity in your home and a clean record of no missed mortgage payments; you could obtain a new loan with brand new terms in addition to lower payment amounts.
Forbearance
Another option to combat foreclosure is to apply for a forbearance. In some cases, homeowners may experience a temporary difficulty meeting their house payments. A forbearance from the lender would allow them to have these payments suspended or reduced for a six-month period. A reinstatement or repayment plan is often included along with the forbearance so that borrowers can bring their mortgages to current once they are in better financial shape.
Unemployment forbearance
Unemployment forbearance is a special t
ype of forbearance plan geared toward borrowers with Fannie Mae and Freddie Mac loans who are facing hardships due to joblessness. This type of forbearance is granted for up to six months and can be further extended for another six months if unemployment hardships continue.
Reinstatement
Reinstatement is a third option for ensuring that you stay in your home. With this option, you can bring your mortgage up to date by making a lump sum payment to cover all of your missed payments and extra late fees and charges. This makes sense especially if you are just recovering from a temporary financial setback. A reinstatement can be used in tandem with a forbearance in cases where you can demonstrate proof of a bonus, tax refund or new source of employment that will allow you to meet the past-due payments and afford subsequent mortgage payments.
Repayment Plan
Perhaps you’re already behind on the mortgage because of hardship but have since become financially stable once again. In that case, a repayment plan could be the best method for you to catch up on your mortgage. This plan is similar to reinstatement. The key difference is that, instead of paying a one-time lump sum, you can make up the payments you’ve missed over an interval of time, paying a combination of your normal monthly payment with a portion of the amount past due.
HAMP
The other feasible option for avoiding foreclosure is loan modification. If you find yourself falling behind on your payments, a traditional modification of the original terms of the loan can provide you with greater stability and affordable monthly payments. Typically, you and the lender will agree to a new length of loan and a more manageable interest rate, provided you can still afford to make payments on the modified loan.
The federal Making Home Affordable Program also includes the Home Affordable Modification Program (HAMP). This program is effective through the end of 2013 and is intended to assist borrowers whose loans are owned by Fannie Mae or Freddie Mac or another participating lender. To qualify for HAMP, applicants must occupy their homes as primary residences and have taken out their mortgages no later than January 1, 2009. Their mortgage payments must also constitute more than 31% of their pre-tax incomes, and they must be considered ineligible for refinance under HARP.
While foreclosure is a grueling experience, don’t think of it as inevitable. Discuss all options with your lender before your hardship becomes worse. These foreclosure prevention options do come with a price — they will likely cause a hit to your credit score — but they are a lesser price to pay than the one that comes from the insecurity of losing your home. Be optimistic, protect your family and explore all the venues you can to keep your American Dream alive.
Comments (8)
Sam
| #
Charles,
I do not think there will be any updates until after the election and then depending on who wins the election.
Reply
Charles Clark
| #
Does anyone know if any progress has been made on HARP 3 or if its just something that is on a wish list.I have a 30 yr fixed convential mortgage which is underwater and Harp 3 looks to be my only hope of saving my home
Reply
Bessie
| #
If our mortgage is not owned by Fannie or Freddie and is a jumbo loan, is there a program we qualify for?
Reply
In need of help
| #
It is very bitter pill to swallow when youve tried everything to be responsible homeowner, 8 yrs as homeowner. means no late payment and current from property taxes, insurance, mortgage payment and knowing about help given to those homeowners which their mortage co is funded by federal’s fanni and freddie called Harp, hamp ( those that didnt succesfully meet the criteria through Harp’s. In our case wells fargo came out to be freddie and mae…unfortunately.we were Denied already from refi, denied mod req fm last year still ended up dealing about accounts-?payments beingvescrow for the first time. Problems Keep adding up no matter u reach up for help through your bank. Today, i called chase and i was hold over the phone for almost 2 hours, diaconnected 5 times, transferredfrom one wrong dept to the other. Im out work for almost 4 mos now. Spent max all my savings and having a baby on top of everthing. I have been spending on a quicksand afterall. I have the 1st mortgage through chase for 520k with 5% apr , b of a for 50k with 4 % apr and rip off private 3rd mortgage for 25k for a 9 % for 5 yrs (whom payment i made through them i cant seem to file for my income tax. Coz they said it was set up to us to be approved on out 1st morgage on the time were applying for loan approval. I have been paying this 3 companies on time , no late payments but never had get any assistance from them from the get go. Im on the verge of losing my home, sanity and begging for mercy or miracle that someday it will ease a little with such overwhelming predicament my family is going through now. Is there really A light at the end of our tunnel?
Reply
Yuichi
| #
Yes, you can. I just did this with my Wells Fargo mortgage. It was my chioce when I refinanced my mortgage whether I wanted to roll in my home equity line or keep it open. I had a decent rate (but not as great as yours wow!) and I chose to keep it open. The bank made no big deal out of it one way or the other, and although I have pretty good credit, I had a very large balance on it, more than $350k.
Reply
Pian
| #
no you will not have to pay it off.but and it is a big but! banks have been trying very hard to titgehn up their exposures to risks, and having a equity line of credit now days is considered a risk.so the holder of second loan (equity line) may not agree for subordination,even though they are the same bank. they may also not allow you to take cash out. unless there is substantial equity exist.your best chance is going to be refinancing with the same lender,and before spending any money,you need to make certain that the line of credit holder is willing to subordinate.
Reply
sam
| #
I would do some shopping around before I pay anything.
Reply
raiza
| #
I refinance my home in MA during 2007 at 6.125%. My balance is 226K for another 25 years.PHH morgage is offering me refinance again via HARP at 4.5 to 5% paying myself closing cost and apraisal.Should I hear their offer?
Reply