Alternatives to Foreclosure

Alternatives to Foreclosure:

There are programs available to help you stay in your home.

The Making Home Affordable Program is part of the government’s effort to stabilize the housing market and help struggling homeowners get relief and avoid foreclosure.  The Program includes opportunities for homeowners in bankruptcy to modify their mortgage to make their payments more affordable through the Home Affordable Modification Program (HAMP).

Homeowners whose monthly mortgage payment exceeds 31 percent of their verified gross (pre-tax) income may apply for a HAMP modification before or after filing bankruptcy.

To qualify for HAMP, a homeowner must:

Own a one to four unit home that is their primary residence

Have received their mortgage on or before January 1, 2009

Have a mortgage payment (including taxes, insurance, and homeowner’s association dues) that is more than 31 percent of their gross (pre-tax) monthly income.

Owe an amount that is less than or equal to $729,750 on their first mortgage for a one unit property

Have a documented hardship

To apply for HAMP, homeowners must submit an Initial Package to their mortgage servicer, which includes:

A complete Request for Modification and Affidavit (RMA).

A complete Tax Authorization Form (IRS Form 4506T-EZ).

Proof of Income

*These forms are available on the Making Home Affordable web site –  Homeowners may also obtain copies of these forms from their bankruptcy trustee.

Mortgage servicers will determine whether homeowners qualify for a HAMP modification.  Homeowners who qualify must complete a trial period of three or four months to demonstrate that they will be able to make reduced payments on time before their mortgage will be permanently modified.

For more information about the Making Home Affordable Program and speak to a HUD approved Housing Counselor for free call:  1-888-995-HOPE (4673).


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