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- Under the Home Affordable Modification Program, homeowners who are struggling to make their monthly mortgage payments can work with their existing mortgage lenders to reduce the size of these payments. Lenders can do this in one of many ways: They can lower the interest rates attached to homeowners' mortgage loans; restructure the terms of home loans; or forgive a portion of the homeowners' principal balances. To qualify for one of these loans, homeowners must prove to their lenders that they have suffered a financial setback that makes it impossible to pay their existing loan payments. Homeowners can do this by sending their lenders copies of such financial documents as their most recent credit card bills, bank savings and checking account statements, most recent federal income tax return and last two paycheck stubs.
- The government's Second Lien Modification Program provides financial relief to those homeowners who have a second mortgage loan in addition to their primary loan. Under this program, lenders receive financial incentives to modify the second mortgage loans of homeowners who are struggling to make their monthly home loan payments. Again, lenders can lower homeowners' monthly payments by reducing the interest rate attached to homeowners' second mortgage loans or by forgiving a portion of these loans' principal balances.
- The Home Affordable Refinance Program is designed for homeowners who would like to refinance their mortgage loans to ones with lower rates but can't because they don't have enough equity in their residences. Most traditional lenders require that homeowners have at least 20 percent equity in their residences before they'll grant them a refinance. Those homeowners whose residences have fallen in value since they purchased them might not have this equity. With the Home Affordable Refinance Program, though, homeowners can work with their existing mortgage lenders to refinance their home loans even if they don't have this equity. In fact, homeowners can refinance through the program even if they owe as much as 125 percent of their home's value on their mortgage loan. This means that owners of homes valued at $100,000 can still refinance even if they owe as much as $125,000 on their homes.
- To take advantage of any of these programs, homeowners must first call their existing mortgage lenders. Though the government offers these programs, it doesn't actually modify any home loans on its own. That job is left to private mortgage lenders. The good news is that most mortgage lenders are participating in these federal mortgage relief programs.
Home Affordable Modification Program
Second Lien Modification Program
Home Affordable Refinance Program
Starting the Process
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