Department of Consumer Affairs   Most requested Los Angeles County websites
County Home Home About this SiteAbout this Site Online Services Contact Us Public Info Public Info Public Alerts Public Alerts Language Privacy
Los Angeles County Department of Consumer Affairs LA County Home Page DCA Home Page

 

THE MISSION OF FEDERAL PROGRAM: MAKING HOME AFFORDABLE

The President's plan seeks to help 7 to 9 million homeowners restructure or refinance their mortgages to avoid foreclosure

Updated Aug. 12, 2010

Last year, the Federal Government started a program, commonly known as "Making Home Affordable," which aims to help millions of homeowners get better mortgages and stay in their homes.

There are three main parts of the plan:

  • Home Affordable Refinance Program (HARP)
  • Home Affordable Modification Program (HAMP)
  • Home Affordable Foreclosure Alternatives Program (HAFA)

Get more information about the program at MakingHomeAffordable.gov.

Refinancing (HARP)

This part of the program is designed to help homeowners who are current on their mortgage payments, but unable to refinance their homes to a lower interest rate because the value of their home has dropped significantly. These homeowners may now be able to refinance into a 30- or 15-year, fixed-rate loan.

These benefits are only available to homeowners whose mortgages are held or securitized by Fannie Mae or Freddie Mac. You can check the webpages for Fannie Mae and Freddie Mac to see if this applies to your home. Also, you must not owe on your first mortgage over 105 percent of the current market value of your home.

Modification (HAMP)

This part of the program is designed to help homeowners who are struggling to afford their mortgage payments and are facing foreclosure.

It is meant for homeowners who:

  • Live in their home
  • Got your current mortgage on or before Jan. 1, 2009
  • Have a monthly mortgage payment that is more than 31 percent of their total monthly income, and
  • Owe, on your first mortgage, less than $729,750.

The government will work with lenders to lower interest rates for five years so homeowners can afford payments at 31 percent of their income. The government will financially reward both lenders and homeowners if they avoid foreclosure, modify their loan and remain current for five years.

In this part of the program, lenders will contact you if you might be eligible. If you think you are eligible but do not hear from your lender after a few weeks, you can call your lender or a HUD-approved counseling agency to see if you are eligible.

Foreclosure Alternatives (HAFA)

Home Affordable Foreclosure Alternatives (HAFA) is the newest part of this plan. It was put into place to help homeowners who do not qualify for HAMP assistance and cannot keep their home, but want to avoid foreclosure. The main options available through HAFA include short sale and deed-in-lieu of foreclosure.

Homeowners can qualify for $3,000 in relocation assistance after a short sale or deed-in-lieu has been completed. Lenders pay all servicing fees so homeowners have no out-of-pocket expenses.

Before being evaluated for HAFA, your lender must first consider you for all other loan modification or retention programs to help you avoid foreclosure.

If you are interested in HAFA, contact your lender and they will determine if you are eligible.

What you can do

Go to MakingHomeAffordable.gov and use their online tool to see if you might be eligible for the programs.

You will need plenty of information, including:

  • Information about your income, including two recent pay stubs or other proof of income
  • Your most recent tax return
  • Information on a second mortgage, if you have one
  • Payments on your credit cards, if you are carrying a balance, and
  • Payments on other loans, like car loans or student loans.

You can call the Department of Consumer Affairs' Real Estate Information division at (800) 973-3370 for up-to-date information on this plan and other real estate issues.

Back