Looking for Home Loan Modification? Let the American Foreclosure Defense Center help!

Economic crisis. Current economic conditions. In today’s economy. These are the terms and phrases that our society has become all too familiar with over the past few years. Nearly anyone you talk to has felt the impact of poor personal financial decisions, or decisions made by the government or other financial institutions that have affected him or her personally. As a result, probably the most commonly shared burden by the average American is the financial impact of the housing market crash, which in turn created a mortgage loan crisis.

The fallout of the housing market, coupled with job loss or pay reduction has forced many people to become delinquent on their mortgages and/or foreclose on their home loans. Home Loan Modification is a viable option to help homeowners who are struggling to remain in their homes.

Home Loan Modification should not be confused with refinancing. Refinancing replaces an existing mortgage with a new loan. Home Loan Modification modifies one or more of the terms of an existing loan.

Refinancing is a great option for homeowners looking to take advantage of low interest rates and reduce their mortgage payments. Realistically, few homeowners have enough equity in their homes to qualify for a new loan; that’s where Home Loan Modification can help.

The objective of Home Loan Modification is to restore the existing mortgage with a payment and terms the homeowner can manage. Each loan and homeowner situation is unique and requires proper assessment of all factors to determine which type of modification a home loan would qualify.

Home Loan Modification and the Making Home Affordable Program

The Obama Administration instituted The Making Home Affordable Program (MHA), which offers a wide range of Home Loan Modification programs. The MHA is a general plan to help homeowners avoid foreclosure and encompasses everything from avoiding foreclosure by lowering payments, to helping homeowners walk away from mortgages they can no longer afford.

Below is a list of the current Home Loan Modification options offered under the MHA plan (taken from www.makinghomeaffordable.gov):

• Home Affordable Modification Program SM (HAMPSM)
• Principal Reduction Alternative SM (PRA)
• Second Lien Modification Program (2MP)
• FHA Home Affordable Modification Program (FHA-HAMP)
• USDA’s Special Loan Servicing
• Veteran’s Affairs Home Affordable Modification (VA-HAMP)
• Home Affordable Foreclosure Alternatives Program (HAFA)
• Second Lien Modification Program for Federal Housing Administration Loans (FHA-2LP)
• Home Affordable Refinance Program (HARP)
• FHA Refinance for Borrowers with Negative Equity (FHA Short Refinance)
• Home Affordable Unemployment Program (UP)
• Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (HHF)

A couple of the most commonly preferred Home Loan Modification options under the MHA program are the HAMP and the HARP. If you are employed but struggling to make your payments, you may be eligible for the Home Affordable Modification Program (HAMP). The HAMP may help reduce your mortgage payment to 31% of your monthly gross income, which is generally substantially less than the average homeowner is paying on their existing mortgage.

The Home Affordable Refinance Program (HARP) is help for homeowners who are not late on payments but are unable to qualify for traditional refinancing because their home value is less than what they owe on their mortgage; they have no equity in the home.

The bottom-line is that there is Home Loan Modification help available. Circumstances many vary, but if you have been negatively impacted by the housing market crash, don’t lose heart, seek out more details about which Home Loan Modification is right for your situation.