More Housing Assistance Programs

By now everyone knows about the Making Home Affordable Program. What's new is that since August 1, participating lenders are now required to include the unemployed and their unemployment benefits to make homeowners eligible for assistance.

This includes making no payments or minimal payments while they look for work. When the homeowner finds employment, the participating lender will evaluate the homeowner for a permanent modification that is based on the new income.

Themoney that was not collected during this forbearance period is still anoutstanding debt and may be added to the balance of the loan or repaideach month in addition to the new payment.

In the works for California is the Keep Your Home forbearance program. It will assist the unemployed who have exhausted the federal assistance program if they have a participating lender.

How is a financially challenged state such as California able to provide this assistance? With federal TARP funds entitled Treasury's Hardest Hit Program.Originally the assistance would be $1500/mo or 1/2 of the mortgagepayment. However, California recently learned they are receiving a moremoney than expected, so plans are being drawn to be more generous. Thisplan will go into effect November 1, 2010.

In addition, HUD will soon announce an Emergency Homeowner Loan Program.It will provide loans up to $50,000 with zero interest to helpborrowers with mortgage payments, taxes, and insurance. This programwas designed to help homeowners who are not covered by the Hardest Hitprogram.

All these programs have stipulations, time-lines, andrequirements. The most important thing is to seek help as soon as youbecome unemployed or miss that first payment. The worse thing you can dois "nothing".
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