Behind in Payments - Need Mortgage Help
“I am falling behind in my mortgage payments because of a recent job loss, and I need help making the payments until I get back on my feet.”
This is a common cry for help in the current economy. Job losses are soaring and homeowners are having trouble making ends meet. Predictably, these same homeowners often fall behind in their mortgage payments and need help of a temporary nature. This is the exact scenario the current administration had in mind when they passed their Homeowner Affordability and Stability Plan (that’s the official name of the program, by the way).
Essentially, the plan is designed to help two distinct groups of homeowners, as shown in the image below:
If you are falling behind on your payments, you would fall under the left side of the diagram above. So you might qualify for a home loan modification under the Homeowner Affordability and Stability Plan.
Who Qualifies for Help?
Borrowers who are behind on their mortgage payments (i.e., in default or at-risk of defaulting) may qualify for help under this plan. Your home loan must have originated before January 1, 2009. The unpaid principal of your mortgage, minus interest, must be less than $729,750. If you do qualify and get approved for a modification, your monthly mortgage payments could be reduced to 31% of your monthly gross income. This program is currently set to end in December of 2012.
It’s important to realize this program won’t make your debt disappear. In fact, it might not even affect the principal balance of your mortgage loan. With that being said, a modification can certainly lower the size of your monthly payments by reducing the interest rate. Only in rare cases will the lender reduce the principal amount owed.
Where to Learn More
To learn more about how this program works and what you need to do next, check out our guide to mortgage modification help for homeowners. If you are behind on payments and need help, it’s important to act immediately. Start researching these programs through the HUD website, and start talking to your lender today.
Mortgage Loans | Brandon | 
March 11, 2009 7:59 am
By Mel Estep, March 20, 2009 @ 1:01 pm
I am currently in bankruptcy and I am behind in my mortgage payments. I need help because I am in danger in losing my house