Government Programs For Mortgage Reduction

How Does A Covid

Fannie Mae is offering repayment options for homeowners who missed their mortgage payments due to a financial hardship related to COVID-19. In fact, earlier this year, Fannie Mae announced a new COVID-19 payment deferral option.

This payment option defers the amount you owe to the end of your loan term . You will have to pay the missed amount when you make your last loan payment or pay off the balance of the loan .

Payments To Servicers Lenders And Responsible Borrowers

• The Program will share with the lender/investor the cost of reductions in monthly payments from 38% DTI to 31% DTI.
• Servicers that modify loans according to the guidelines will receive an up-front fee of $1,000 for each modification, plus âpay for successâ fees on still-performing loans of $1,000 per year.
• Homeowners who make their payments on time are eligible for up to $1,000 of principal reduction payments each year for up to five years.
• The program will provide one-time bonus incentive payments of $1,500 to lender/investors and $500 to servicers for modifications made while a borrower is still current on mortgage payments.
• The program will include incentives for extinguishing second liens on loans modified under this program.
• No payments will be made under the program to the lender/investor, servicer, or borrower unless and until the servicer has first entered into the program agreements with Treasurys financial agent.
• Similar incentives will be paid for Hope for Homeowner refinances.

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Switch From An Adjustable

Switching from an adjustable-rate mortgage to a fixed-rate mortgage might not lower your existing payments, but it could help protect you from rising interest rates down the road.

Since ARMs are set up to have floating rates, they change with the market. For example, if your interest rate is 3.5% and the average rate rises to 4%, so will your rate. This can be a bad scenario if youre in a rising-rate environment. By locking in your interest rate, youre guaranteed to pay the same interest rate over the life of your loan, regardless of what the market does.

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Fannie Maes New Refinance Option Available Beginning June 5

WASHINGTON, DC Fannie Mae today issued additional details about its new RefiNow option, which is available for qualifying homeowners with a Fannie Mae-owned mortgage beginning June 5, 2021. Initially announced April 28 by the Federal Housing Finance Agency, RefiNow makes it easier for eligible homeowners earning at or below 80% area median income to refinance at a lower interest rate and reduce their monthly mortgage payment.

Lower-income borrowers typically refinance at a slower pace than higher-income borrowers, potentially missing an opportunity to save on housing costs. Fannie Maes new RefiNow option will help more homeowners refinance by removing some of those barriers, improving affordability, and promoting sustainable homeownership, said Malloy Evans, Senior Vice President and Single-Family Chief Credit Risk Officer, Fannie Mae.

Homeowners can determine if Fannie Mae owns their mortgage by visiting Fannie Maes Loan Lookup Tool at KnowYourOptions.com.

RefiNow helps homeowners by:

To qualify for RefiNow, homeowners must have:

• A Fannie Mae-backed mortgage secured by a 1-unit, principal residence
• A current income at or below 80% of the AMI
• Not missed a mortgage payment in the past six months, and no more than one missed mortgage payment in the past 12 months and
• A mortgage with a loan-to-value ratio up to 97%, a debt-to-income ratio of 65% or less, and a minimum 620 FICO score.

Mortgage Relief Refinance Programs: Hiro And Fmerr

Former relief programs from Fannie Mae and Freddie Mac, including the Enhanced Relief Refinance and the High-LTV Refinance Option , have been paused due to a low number of applicants.

These programs were largely designed to offer mortgage relief to underwater borrowers those who owe more on their mortgage than their home is worth. Thanks to rising home values nationwide, the number of underwater borrowers has shrunk dramatically.

As a result, many homeowners are eligible to refinance but just dont know it yet.

So if youre looking for a mortgage relief refinance, its still worth talking to a lender. There are a wide variety of refinance options available today, and you may well qualify for one of them.

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Is There Congress Mortgage Stimulus Or Covid

Although theres no current mortgage stimulus from Congress, there is federal help available for homeowners.

When President Joe Biden signed the American Rescue Plan into law in March 2021, it famously included stimulus checks to nearly all households. It also provided special financial assistance for homeowners who were or are struggling financially as a result of the COVID-19 pandemic.

The Homeowner Assistance Fund is intended to help with your monthly mortgage payments and with property taxes, homeowners insurance, homeowners association fees and utility bills.

Although these are federal funds, theyve been sent out to states to administer. For help, you apply to your states housing finance agency. Locate your states agency and contact information with this lookup tool.

There are some eligibility requirements for these funds. To qualify, your mortgage balance must be $548,250 or less, and most of the funds are designated for borrowers with average or below-average incomes.

Will My Home Be Foreclosed Now That Forbearance Has Ended

Though the forbearance period has ended for most borrowers, the CFPB and the Biden Administration have put new rules in place to prevent a massive wave of imminent foreclosures. Lenders are required to allow borrowers many options including:

If none of those options are possible for borrowers, there are still additional restrictions in place through Dec. 31, 2021. Lenders can only start the foreclosure process if the borrower has abandoned their property, has not responded to inquiries from the lender for more than 90 days , or was more than 120 days behind on their mortgage prior to the pandemic .

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New Biden Legislation Offers Homeowners Additional Coronavirus Mortgage Relief

The Coronavirus, Aid, Relief, and Economic Security Act directed lenders holding federally backed single-family mortgages to suspend borrowers payments for up to a maximum of 360 days if they experienced financial hardship due to the coronavirus outbreak. Similar but shorter forbearance was available to owners of multifamily units with federally backed mortgages.

Subsequent legislation, including the Consolidated Appropriations Act, 2021 and the American Rescue Plan Act of 2021, as well as presidential executive actions, have resulted in additional mortgage relief in the wake of the 2020 financial crisis.

Q: In A Hamp Modification That Includes A Pra Principal Reduction The Holder Of The Loan Reduces The Pra Forbearance Amount By More Than The Pra Investor Incentive Payments What Federal Income Tax Consequences For The Homeowner Result From That Additional Reduction By The Holder

A3: To the extent that the reduction in the PRA Forbearance Amount is more than the PRA investor incentive payments, the reduction is from the discharge of indebtedness. The full amount of this discharge of indebtedness is reported to the IRS and the homeowner on Form 1099C, Cancellation of Debt, regardless of whether the homeowner may exclude any, or all, of it from gross income. See Questions 4 and 5 below for discussion of some exclusions that may apply.

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Fmerr: The Enhanced Relief Refinance Program

Editors note: Freddie Mac has temporarily paused the FMERR program due to a low number of applicants. With home equity increasing nationwide, many owners are eligible to refinance without needing a special program like FMERR. Contact a lender to check your equity levels and find out whether you qualify for a refinance.

For borrowers with a mortgage through Freddie Mac, Freddie Macs Enhanced Relief Refinance program was created to help homeowners with limited equity take advantage of historically low interest rates and reduce their monthly payments.

Usdas Special Loan Servicing

(See USDA Loss Mitigation Handbook, pp 13-15.

If you have a loan that is guaranteed by the United States Department of Agricultures Section 502 Single Family Housing Guaranteed Loan Program, you may be eligible for a program through that government agency. Contact your servicer or a housing counselor for more information.

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Types Of Flex Modification Programs

Aside from the traditional Flex Modification, there are variations of this program designed for homeowners experiencing different types of hardship. The table below breaks down these differences in eligibility, using the Streamlined evaluation process.

What If You Have A Non

Federal regulators believe most non-government-backed lenders and loan servicers will adopt policies similar to those mandated by the CARES Act and subsequent legislation. To find out, contact your loan servicer, ask what programs it has in place to provide mortgage relief to homeowners impacted by the coronavirus outbreak, and follow any instructions you are given.

Although the CARES Act does not require private lenders to offer mortgage assistance, if you and your lender come to any type of loan modification agreement, then the law regarding not reporting reduced or paused payments to does apply to you.

If your mortgage forbearance is set to expire soon, then you may be able to request an extensionbut you must apply before forbearance ends.

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How To Get Help

If you think you might have trouble making a mortgage payment your first call should be to your mortgage servicer . They may be able to arrange temporary mortgage assistance options, including a mortgage forbearance plan.

No matter what the future brings, Fannie Mae will be here to help, providing you with the reliable information you need about forbearance plans and other kinds of mortgage assistance.

If you’re a homeowner who is financially impacted by COVID-19, you’re not alone. Our Loan Lookup tool can help you see what free resources are available to you.

Take Advantage Of Historically Low Interest Rates With Refinance Relief Programs

These new programs are important because mortgage rates have plunged in the last 18 months. The 30-year-fixed mortgage rate hit its lowest level ever in early January 2021, bottoming out at 2.65%.

Even as of October 2021, 30-year fixed-rate mortgage rates hovered just below or slightly above 3%.

Todays Mortgage Interest Rates: December 1, 2022

Copyright 2022 Freddie Mac. Averages are based on conforming mortgages with 20% down.

Homeowners with home values that were too low relative to their mortgage balances were barred from taking advantage of these historically low interest rates and from the substantial monthly savings that came with them.

Thats where HIRO and FMERR come in. Both programs allowed homeowners to refinance their Fannie or Freddie mortgages, even if their homes were underwater, or higher than their homes market value. Though these relief programs are currently paused, many homeowners are finding they can still refinance to a lower payment thanks to rising equity and low interest rates.

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Is There A Mortgage Relief Program In 2022

With the impact of Covid waning, Congress has wound down much of its Covid-era mortgage stimulus.

Fortunately, there are still mortgage relief programs available to homeowners who need them.

Mortgage relief can come in many forms. Whether you need a lower rate and payment or a break from making payments altogether, there are options. Heres what to do.

In this article

• Do you qualify?

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These options augment additional COVID protections HUD published last month. These included the foreclosure moratorium extension, forbearance enrollment extension, and the COVID-19 Advance Loan Modification: a product that is directly mailed to eligible borrowers who can achieve a 25% reduction to the P& I of their monthly mortgage payment through a 30-year loan modification. HUD believes that the additional payment reduction will help more borrowers retain their homes, prevent future re-defaults, help more low-income and underserved borrowers build wealth through homeownership, and assist in the broader COVID-19 recovery.

Additional AssistanceIn addition to these new opportunities for borrowers, agencies across the federal government are also taking other steps to support borrowers as our economic and public health recovery continues.

Giving Borrowers the Information They Need to Understand their OptionsThese new loan modification and payment reduction options will only give borrowers the relief they need if borrowers have the information to understand their options.

Borrowers should contact their servicer or housing counselor as soon as possible to learn more about the options available.

For borrowers not currently in forbearance, there is still an opportunity to access relief.

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How To Request Homeowner Assistance Funds

Homeowner assistance funds are in the process of being distributed to states for redistribution to homeowners. The U.S. Department of the Treasury has provided guidance for states to use in developing their individual HAF plans.

You will request funds from your state after your states HAF plan has been approved and its system is up and running. Meanwhile, the National Council of State Housing Agencies Homeowner Assistance Fund webpage features a map showing the status of each states HAF to date.

How To Request Emergency Rental Assistance

Because the Treasury disburses ERA funds to states and other entities, you must apply for ERA assistance through the appropriate state or entity. To help with this, the Treasury has created a webpage to help tenants and landlords find rental assistance programs in their local area. Use it to direct yourself to the appropriate state or other authority to determine how to apply to receive assistance or to help your tenants do so.

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Talk To A Certified Housing Counselor For Free Legitimate Help

• Go to the Department of Housing and Urban Developments list of approved housing counseling agencies to find a counselor in your state who can explain your options.
• Visit makinghomeaffordable.gov, a website from the Department of the Treasury and HUD, or call their help line at 1-888-995-HOPE .
• Visit the websites for the Consumer Financial Protection Bureau , Federal Housing Finance Agency , and Department of Housing and Urban Development . These agencies are working together to help homeowners and renters affected by the coronavirus pandemic.

Home Affordable Modification Program

The largest program within MHA is the Home Affordable Modification Program . HAMPs goal is to offer homeowners who are at risk of foreclosure reduced monthly mortgage payments that are affordable and sustainable over the long-term.

HAMP was designed to help families who are struggling to remain in their homes and show:

• Documented financial hardship.
• An ability to make their monthly mortgage payments after a modification.

HAMP is a voluntary program that supports servicers efforts to modify mortgages, while protecting taxpayers interests. To protect taxpayers, MHA housing initiatives have payforsuccess incentives. This means that funds are spent only when transactions are completed and only as long as those contracts remain in place. Therefore, funds will be disbursed over many years.

Starting in the summer of 2012, the scope of the program will expand to help even more families in need.

HAMP works by encouraging participating mortgage servicers to modify mortgages so struggling homeowners can have lower monthly payments and avoid foreclosure. It has specific eligibility requirements for homeowners and includes strict guidelines for servicers. The program includes incentives for homeowners, servicers, and investors to encourage successful mortgage modifications.

Before HAMP, there was no standard approach among loan servicers or investors about how to help homeowners who wanted to keep making payments, but needed mortgage assistance.

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Fmerr Eligibility: Qualify For Mortgage Relief And A Lower Interest Rate

You may be eligible for FMERR if:

• Your current mortgage is owned by Freddie Mac*
• Your loan was originated on or after November 1, 2018
• Your LTV is at least 97.01% for a one-unit, owner-occupied resident
• You have made all your payments on time in the last 6 months
• Your mortgage balance is 97.1% or higher as a percentage of your homes market value, for a one-unit, owner-occupied dwelling

*You may not even know that your mortgage is owned by Freddie Mac. If youre unsure, use this lookup tool on the Freddie Mac website.

If you meet these conditions you are very likely to have access to lower rates but you need to act now before rates go up. Speak with your mortgage lender about relief options.

Homeowner Assistance Funding Now Available

Senator Anna M. Kaplan

• Department of Housing and Community Renewal

Dear Neighbor,

As your State Senator, I have fought hard for programs and services that help alleviate the burden of the pandemic on Long Island families. I’m excited to share with you that the New York State Homeowner Assistance Fund , a program that will provide up to $539 million to help eligible homeowners avert mortgage delinquency, default, foreclosure, and displacement as a result of the pandemic, will begin accepting applications on a first come, first served basis beginning Monday, January 3, 2022.

There is expected to be a significant demand for this program, so I urge anyone who might benefit to visit nyhomeownerfund.org today to learn more, see if you qualify, and gather necessary documents to apply first-thing Monday, January 3.

Who is eligible to apply?

You may be eligible if you are a homeowner and are:

• Behind or in forbearance on your mortgage
• Behind on payments for property taxes, water bills, or sewage bills
• Behind on your monthly maintenance charges on your coop or condo
• In default on a reverse mortgage
• Behind on loans, installment contracts, or lot rent repayments for a manufactured home

What type of assistance is available under the NYS HAF program?

The program will provide eligible homeowners impacted by the pandemic with several types of support, including:

Are there restrictions for who can apply based on income?

Where can I get answers to frequently asked questions?

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