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Since the housing market began to collapse, federal officials and the mortgage industry have launched several programs aimed at keeping homeowners in their homes. Here are highlights of some of the most high-profile programs.
HUD: Hope for Homeowners
What it does: Helps troubled homeowners refinance with 30- or 40-year government-backed mortgages. Borrower must have made at least six mortgage payments to qualify, and the loan also must have originated before Jan. 1, 2008, and must not surpass $550,440. Borrowers pay hefty fees and high interest rates to participate and must split any increased value with the federal government when the home is sold. Owner-occupied. Current and delinquent borrowers. Principal reduction.
Good option for: Homeowners whose home values have fallen below their loan amount. The program requires lenders to reduce the loan amount by at least 3.5 percent below the home's value in a principal-forgiveness program.
Contact: The company that collects your payments; for more information, see http:/
Results: The program launched in October but was revamped last month after running into problems. As of earlier this month, Hope for Homeowners has attracted 312 applications.
HUD: FHASecure
What it does: Homeowners with adjustable-rate mortgages can refinance with new 30-year, fixed mortgages. Originally, FHASecure required borrowers to be delinquent because of an interest rate reset to qualify, but it is now more flexible. The program requires a 3 percent down payment paid for either by the borrower or the lender. Owner-occupied. Current and delinquent borrowers. Principal reduction or forbearance permitted but not required of lender.
Good option for: Borrowers with adjustable-rate mortgages.
Contact: The company that collects your payments; for more information, see http:/
Results: Since the program was launched in September 2007, more than 473,000 borrowers' loans have been modified into new mortgages. The program expires Dec. 31.
FHFA: Streamlined Modification Program
What it does: With backing from the Federal Housing Finance Agency, borrowers with mortgages owned or guaranteed by Fannie Mae and Freddie Mac and who are 90 days or more delinquent will be eligible for a new loan with a payment that does not exceed 38 percent of their gross monthly income. Loan must have been originated before Jan. 1, 2008. Does not include current borrowers. Owner-occupied. Includes principal forbearance but not forgiveness.
Best option for: Seriously delinquent homeowners.
Contact: The company that collects your payments.
Results: The program launched Dec. 15. The FHFA would like to see the number of modifications Fannie Mae and Freddie Mac complete next year increase by 25 percent, or by about 15,000, to 75,000.
IndyMac
What it does: Delinquent borrowers with IndyMac loans can be refinanced into new mortgages with payments that do not exceed 38 percent of gross income. Includes principal forbearance but not forgiveness. Owner-occupied. Does not include current borrowers.
Best for: IndyMac customers already 60 days delinquent on their loan.
Contact: http:/
Results: Since the effort was launched in September, the FDIC program has modified more than 8,500 loans and 9,500 more are in the pipeline. But the program has run into problems reaching some homeowners and has found that some borrowers did not make enough to qualify for a better loan.
