Types Of Government Mortgage Reduction Programs
One of the biggest problems in the current economic crisis is foreclosure. Due to delinquency in mortgage payments, several homeowners are facing foreclosure. If you are in a similar situation, you should know about the government mortgage reduction programs that can help you come out of this stressful situation.
Payment Reduction Plan
PRP is a program meant to help homeowners prevent foreclosure. Under this program, mortgage payments can be reduced by up to 30 percent. It is available to people who have defaulted on mortgage payments or likely to do so and are not eligible for Home Affordable Modification Program. You can apply for government mortgage reduction program even if the property in question is not a self-occupied one. In this plan, during the forbearance period of maximum six months, both the servicer and the borrower develop a plan to prevent foreclosure. If the plan is successful, the servicer is paid incentives besides the fee.
Home Affordable Modification Program
If your self-occupied property is on the verge of foreclosure, you can apply for the Home Affordable Modification Program, subject to fulfilment of the following conditions:
1.You have defaulted on mortgage payments or face the risk of the same,
2.Your loan has originated on or before January 1, 2009,
3.The outstanding principal is not greater than $729,750,
4.The total outstanding amount is not more than 125 percent of the present value of your home.
In addition to above, you have to prove the hardship that has forced you to default on loan payments.
Under this plan, mortgage payments can be reduced by up to 50 percent. The aim is to bring the payments below 38 percent of the monthly income of the borrower. This is done by reducing the interest rate, increasing the loan period or reducing the principal. However, the interest rate cannot be reduced below 2 percent.
Lenders are encouraged to participate in the program through incentives. For each application that is accepted for this government mortgage reduction program, a lender gets an upfront fee of $1000. If a borrower under this plan pays his installments diligently, then the lender would get $1000 every year for the first three years. The incentives are available not only to lenders but also to borrowers. If a borrower who has opted for Home Affordable Modification Program pays his installments diligently, he would get $1000 reduction in principal every year for the first five years.
If you are planning to opt for a government mortgage reduction program, you should be wary of scams. There are many unscrupulous people out there who are making money out of people reeling under mortgage problems. Do not pay any money for counseling. Also, do not deal with people who ask for government mortgage reduction program’s fee. Since there are many homeowners trying to take advantage of this program, qualifying for it may not be easy. Hence, be persistent in your efforts. Try to convince your lender that you have genuine reasons for defaulting on payments and hence you should be considered for the mortgage reduction Florida 2010 program.
Our website provides you with all the information about government mortgage programs. For more about government mortgage reduction program visit the link.
Processing your request, Please wait....
