Foreclosure Help New York

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) August 4, 2009 --

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Foreclosure Help New York

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The FHA has announced yet one more add-on to its programs aimed at foreclosure help for homeowners to avoid foreclosure or to stop foreclosure from taking their homes. HUD secretary Shaun Donovan put forth new guidelines for the FHA’s Affordable Modification Program to bring it into conformity with President Obama’s May Helping Families Save Their Homes Act of 2009. And although New York has enjoyed comparatively less severe foreclosure statistics, this latest from the FHA represents good news of foreclosure help desperately needed among the thousands of distressed New York homeowners.

These new guidelines, which will take effect August 15, will enable current FHA borrowers to permanently lower their monthly mortgage payments, should they ask for—and receive—loan modification from their current loan provider. In the past, only homeowners with Fannie Mae or Freddie Mac loans were eligible for Obama’s loan modification programs.

The new modification guidelines, using a partial claim option the FHA has allowed in the past to enable loan servicers to advance funds to delinquent homeowners to bring their mortgages current by reducing outstanding principal balances by as much as 30% and recalculating payments. In turn, monthly payments are lowered to a level the homeowners can afford.

Repayment is expected of the deferred amount, and will begin once the first mortgage is paid off. This HUD mechanism is, for all intents and purposes, an extension of the loan term past the usual 30-year term, but does provide some much-needed foreclosure help where such help has been seriously lacking previously.

HUD secretary Donovan, speaking of these current foreclosure help actions said, “…tens of thousands of FHA borrowers will now be able to modify their mortgages in the same manner as [are] many others who are taking advantage of the Administration’s Making Home Affordable program…this is just the latest tool we are providing to help homeowners prevent foreclosures…”.

To qualify for the loan revision, the homeowner must provide the usual documentation detailing his/her financial situation, showing evidence of significant hardship. The borrower’s debt to income ratio must be between 31 and 55 percent, and the borrower must prove ability to making new payments for a 3-month trial period; any delinquency on the part of the borrower will result in loss of eligibility for the modification. The FHA is paying incentives to loan servicers for each loan modified and processed under the new guidelines.

As the government and other such supported groups devise programs to provide foreclosure help to distressed homeowners, borrowers and sellers need to remain vigilant in self-education about how to avoid or stop foreclosure. Programs like the one mentioned above are great news, but for the most part, these programs, according to many critics, aren’t making significant headway. Homeowners who have become unable to make mortgage payments due to job loss, loss of spouse, or serious illness should take action and consult professional foreclosure help such as a short sale service or loan modification group instead of waiting on government help to come along.




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