Refinance or Modify Your Mortgage
If you are struggling to make your mortgage payments or can’t take advantage of lower interest rates because your home has dropped in value, you may be eligible for the Making Home Affordable Program, which is intended to help responsible homeowners and strengthen the housing market. The program has two key components:
Home Affordable Refinance
Many homeowners pay their mortgages on time but are not able to refinance to take advantage of today's lower mortgage rates, perhaps due to a decrease in the value of their home. The Home Affordable Refinance may help borrowers, whose loans are held by Fannie Mae or Freddie Mac, refinance into a more affordable mortgage.
Home Affordable Modification
Many homeowners are struggling to make their monthly mortgage payments either because their interest rate has increased or they have less income. The Home Affordable Modification may provide them with mortgage payments they can afford.
Rest easy. In just a few simple steps, you'll be on your way to contacting your mortgage company with confidence.
Use this checklist to ensure you have all the information you will need when you speak to your mortgage lender or housing counselor:
- Most recent income tax return with all schedules and W-2s;
- Two most recent bank statements;
- Two most recent pay stubs (if you receive them) or documentation of income you receive from other sources;
- Monthly mortgage statement showing the mortgage lender information and mortgage loan account number;
- Information about other mortgages on your home, if applicable;
# Account balances and minimum monthly payments due on all of your credit cards;
- Account balances and monthly payments on your other debts (such as student loans and car loans);
- Estimates of other monthly expenditures (such as utility bills, food expenses, insurance payments, and entertainment expenses);
- It may also be helpful to have a hardship letter describing any circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.), if applicable.
Notice: Our toll-free 1800DEBT.COM number is primarily for consumers with credit card debt. The agencies that handle these calls and the programs that they offer, e.g., a Debt Management Plan and Debt Settlements, do not provide loan modification services or mortgage financing. Most consumers who are at risk of losing their home, however, are financially stressed and have credit card debt that they must also resolve, and doing so could help save their home. If you have credit card debt, by all means call 1800DEBT.COM (that's 1800-332-8266) for a FREE debt consultation. Or click here to apply online for debt relief and other options..
Loan Modification Frequently Asked Questions
A Loan Modification is a permanent change in one or more of the terms
of a mortgagor's loan, allows the loan to be reinstated, and results
in a payment the mortgagor can afford.
Question 1: In utilizing the Loan Modification option to bring an asset
current, can the mortgagee include all fees and corporate advances?
Answer: Mortgagee Letter 2008-21 states in part:
Legal fees and related foreclosure costs for work actually completed
and applicable to the current default episode may be capitalized
into the modified principal balance.
Question 2: May a mortgagee perform an interior inspection of the property
if they have concerns about property condition?
Answer: Yes, per Mortgagee Letter 2000-05, page
20, the mortgagee may conduct any review it deems necessary to verify
that the property has no physical conditions which adversely impact
the mortgagor's continued ability to support the modified mortgage
Question 3: Can a mortgagee include late charges in the Loan Modification?
Answer: Mortgagee Letter 2008-21 states that accrued late charges should be waived by the mortgagee at the time of the Loan Modification.
Question 4: When utilizing a Loan Modification option, can a mortgagee
capitalize an escrow advance for Homeowner's Association fees?
Answer:HUD Handbook 4330.1 REV-5, Paragraph 2-1, Section B, Escrow Obligations states: Mortgagees must also escrow funds for those items which,
if not paid, would create liens on the property positioned ahead
of the FHA-insured mortgage.
Question 5: Is there a new basis interest rate which mortgagees may assess
when completing a Loan Modification?
Yes, Mortgagee Letter 2009-35 states that the Mortgagee shall reduce
the Loan Modification note rate to the current Market Rate. Please
refer to Mortgagee Letter 2009-35 for more details.
Question 6: Are mortgagees required to re-amortize the total amount due
over 360 month period?
Yes, per Mortgagee Letter 2009-35, the Mortgagee must re-amortize
the total unpaid amount due over a 360 month period from the due
date of the first installment required under the modified mortgage.
Question 7: What date is utilized when determining the correct interest
rate for a Loan Modification?
The date the Mortgagee approves the Loan Modification (all verification
completed and servicing notes documented, reported to SFDMS) is
the date that Mortgagees are to use in determining the interest
Question 8: Will HUD subordinate a Partial Claim, should a mortgagor
subsequently default and qualify for a Loan Modification?
Answer: If a mortgagor subsequently defaults and
qualifies for a Loan Modification, HUD will subordinate the Partial
Question 9: Are mortgagees required to perform an escrow analysis when
completing a Loan Modification?
mortgagees are to perform a retroactive escrow analysis at the time
the Loan Modification to ensure that the delinquent payments being
capitalized reflect the actual escrow requirements required for
those months capitalized.
Question 10: Can a mortgagee qualify an asset for the Loan Modification
option when the mortgagor is unemployed, the spouse is employed,
but the spouse name is not on the mortgage?
Based upon this scenario, the mortgagee should conduct a financial
review of the household income and expenses to determine if surplus
income is sufficient to meet the new modified mortgage payment,
but insufficient to pay back the arrearage. Once this process
has been completed the mortgagee should then consult with their
legal counsel to determine if the asset is eligible for a Loan
Modification since the spouse is not on the original mortgage.
Speak To A Certified Debt Professional
We strongly suggest that you speak to several professionals in the housing industry. Obviously you can call anyone that you wish and speaking to 3 or more professionals may prove very beneficial in finding the right solution. So, by all means, be sure to check out the various resources listed on this page and website.
We highly recommend, however, that if you are also having trouble managing your debts and unable to make timely payment that you call 1800DEBT.COM for a FREE debt consultation. By calling this number you will not only be able to speak immediately to a "certified" debt specialist, but based on the area code you're calling from, your call will automatically be routed to a debt professional in your local area. Today, each state has their own laws, regulations and licensing requirements, so it's important to speak with someone who is familiar with your particular area. Call 1800DEBT.COM right now or click here to apply online for debt relief and other options..
In addition, the debt management specialist will be able to assist you in various ways depending on your particular situation. So do yourself and your loved ones a huge favor that could significantly change your lives and call right now and speak to a debt professional. The call is absolutely free, completely confidential and there is no obligation whatsoever. You truly have nothing to lose, except, that is — your debt!
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