Foreclosure Avoidance Programs get Facelift

Three foreclosure prevention initiatives begunrnin the early years of the housing crisis will receive updates to better reflectrnthe changing needs of distressed homeowners and motivate their continuedrnon-time mortgage payments.  The U.S.rnDepartments of Treasury and Housing and Urban Development (HUD) announced thernrevisions to the three, all of which operate under the joint HUD/TreasuryrnMaking Home Affordable (MHA) program.</p

“While the housing sector hasrnstrengthened in recent years, there are still many homeowners struggling tornmake their mortgage payments,” said Secretary of the Treasury Jacob J. Lew.rn”The changes we are announcing today offer meaningful incentives for borrowersrnto stay current in their modifications, increase their opportunity to buildrnequity in their homes, and provide vital safety nets for those facing greaterrnfinancial strains.”</p

The Home Affordable Modification Programrn(HAMP), established in 2009, offers homeowners loan modifications with lower monthlyrnpayments achieved through lowered interest rates and modified loan terms.  Many homeowners with HAMP modifications havernbeen eligible to earn up to $5,000 if they adhere to modification terms forrnfive years.  The amount is applied torntheir outstanding principal balance.</p

Under the revisions an additional $5,000</bwill be available to homeowners after a sixth year of on-time payments and theyrnwill then have the opportunity to re-amortize the reduced mortgage balance,rnthus further lowering their monthly payment.   HUD/Treasury estimate some one millionrnborrowers with HAMP modifications may be eligible for the new incentive.  </p