Addressing the problems that arose from the housing bubble’s burst, President Obama implemented his Making Homes Affordable strategy under the Housing and Urban Development sector of the government. The goal of MHA is to assist home owners with bloated mortgages from facing foreclosure and a strained living through various means. MHA is broken down into different sections to address different situations.
Major programs like HARP and HAMP are there to provide opportunities for those up on their mortgages but struggling. They work, in part, with major federal lenders like Fannie Mae and Freddie Mac to offer assistance to Americans who are struggling to keep the American Dream alive. However, despite the wide reaching benefits from programs like HARP, HAMP, HAUP, and their Second Lien Motification Program, few people are fully aware of MHA‘s existence, what it does, and how to take advantage of it.
HARP‘s primary function is to offer refinancing to homeowners who are and have been current on their mortgage payments but are suffering from high interest rates or are paying off houses who have subsequently become underwater since the housing bubble’s burst. Loans covered under Fannie Mae and Freddie Mac may be eligible for restructuring or refinancing. The advantages are typically a lower interest rate dependent on the amount of depreciation homes have suffered from the effects of the bubble bursting. The two main points of HARP are that lenders are covered under federal loan programs and that they are current on their financial obligations. Working with a HARP servicer will determine how much of a refinance your home is worth and put into place the changes necessary to lower interest rates and adjust for premiums imposed prior to the bubble’s burst.
HAMP, on the other hand, is the government’s primary modification program. HAMP is aimed at helping homeowners with high mortgages modify their current mortgage to avoid foreclosure or just reduce the amount of stress placed on homeowners with inflated mortgages and high interest rate. HAMP helps both home owners who are up-to-date on their mortgages as well as those who are starting to fall behind. A major advantage to loan modification through HAMP is that costs and fees are either waived or greatly reduced.
HAMP is also a good opportunity to avoid foreclosure. Servicers under HAMP’s umbrella must give homeowners the opportunity to pursue all avenues before a foreclosure is complete. HAMP is able to stall foreclosures and potentially offer homeowners a way to modify their loan, buy some time to prove that they are willing and eager to pay back the loan, and stop the foreclosure altogether.
The Making Homes Affordable strategy has many facets, covering a great deal of situations based on the individual homeowner’s situation and needs. Its wide reach means that many can be protected and assisted through its programs.