by LShave
Government Funding

Discover How Government Programs Can Stop Foreclosure

If you are facing possible foreclosure, then the government’s mortgage reduction programs can save your home.  Foreclosure is a big problem that you must never underestimate.  You have to seek ways how to prevent it and find programs that will reduce your mortgage payments. 

The PRP or Payment Reduction Plan

The Payment Reduction Plan is specifically designed to stop foreclosures.  The program seeks to reduce mortgage payments by up to 30 percent.  The PRP is available for homeowners who are defaulting on their mortgage payments.  It is also intended for those who can not qualify for the Home Affordable Modification Program.  

You will be able to get this type of government help even if you are not currently occupying the property.  Under this plan, the borrower and the servicer will mutually develop a plan to prevent foreclosure. Once the plan succeeds, then the servicer will get incentives plus the standard fees.  

The Home Affordable Modification Program

This program can greatly help if your self-occupied home is facing foreclosure.  You can apply if you meet the requirements of the program.  The following conditions should be fulfilled:

1.  You are qualified if you have defaulted on your payments and you are facing possible foreclosure.  

2.  You took out a mortgage on or before January 1, 2009.  

3.  You have an outstanding principal worth 9,750. 

4.  The outstanding amount should not exceed 125 percent of the total home value.  

Aside from these conditions, you are also required to prove that you are experiencing real hardship.  You have to prove that this hardship is forcing your to default on your mortgage payments.  

You will be able to reduce your mortgage payments by up to 50 percent if you participate in the Home Affordable Modification Program.  The program seeks to reduce your payments by up to 38 percent of your monthly income.  There are three ways how this could be done.  First, the program will reduce your interest rate. Second, the principal can be reduced.  And lastly, the term of the loan can be extended.  Take note though that the interest rate can not be reduced below 2 percent.  

This program provides incentives for participating lenders.  The lender will get an upfront fee of 00 for every application that is accepted into the program.  The lender will also get 00 annually for three years if the borrower pays the mortgage diligently.  Borrowers can also get incentives from Home Affordable Modification Program.  If you are a borrower and you pay diligently, then you will get 00 yearly principal reduction for the first five years.  

If you are interested to get a government mortgage reduction plan, then you have to be aware that there are many scams out there.  Do not pay a fee to services offering so-called government assistance plans.  It is also not wise to pay money for counseling.  

It is not easy to qualify for government mortgage reduction plans.  There are other homeowners who are also interested in these programs.  So you need to thoroughly convince your lender that you need such programs in order to save your home from foreclosure.

Government Funding