| Many homeowners are able to solve their financial | | | | have actually lost equity. This is not the fault of the |
| problems by accessing President's Making Home | | | | homeowner and HOPE for Homeowners |
| Affordable (MAH) plan. The MHA plan officially | | | | acknowledges this. In order to obtain this type of |
| became law on March 4, 2009 and now millions of | | | | refinancing, homeowners must participate in equity |
| homeowners across America who were facing | | | | sharing if they want to avoid foreclosure. |
| foreclosure have a way to save their homes. The plan | | | | Equity is how much of your mortgage loan you have |
| also creates a lot of questions about the difference | | | | paid off. HOPE for Homeowners requires those who |
| between loan modification and FHA refinancing. | | | | refinance under this plan to split their equity with them |
| You should know that a MHA plan is only accessible | | | | when the house is sold. If you sell your house within |
| for homeowners who have mortgages backed by | | | | the first twelve months of refinancing the FHA gets all |
| Freddie Mac or Frannie Mae. There are other plans | | | | of the equity. If you sell it after five years they get half. |
| that work with other types of loans, but they are not | | | | This plan can be accessed until September 20, 2011 |
| as easy to access, apply for or get as the MHA home | | | | through the FHA. |
| loan modification plan. The government is trying to find | | | | If Frannie Mae or Freddie Mac insures your loan, the |
| a way to have the MHA cover more loans. | | | | MHA will handle your loan modification. If you are |
| If your hard times are due to the economic recession | | | | paying 31% or more of your gross monthly income on |
| in the United States, you are in good company. A lot of | | | | your mortgage, you are able to apply for a loan |
| people are having trouble paying their mortgages and | | | | modification to get your mortgage payments reduced |
| there are two things they can do in reaction to this. | | | | to something you can afford. There is a set procedure |
| They can modify their loan using the MHA plan or they | | | | for a loan modification. They begin by reducing interest |
| can check out FHA refinancing. What one you choose | | | | rates until they hit 2%. When a lender approves a loan |
| is dependant on who insures your mortgage loan. If | | | | modification, they get an incentive payment from the |
| you do not know who this is, call your lender and ask. | | | | government as a reward. Borrowers are also given an |
| If you have a FHA loan, you can access the HOPE | | | | incentive if they pay their modified payments on time. |
| for Homeowners program. This program allow | | | | They also get to keep their house. |
| homeowners who do not qualify for more traditional | | | | Both a loan modification and FHA financing can help |
| methods of refinancing, a way to get it. In the past, | | | | you avoid foreclosure and allow you to stay in your |
| homeowners have had to have 20% equity to qualify | | | | house. This article has outlined how to decide between |
| for refinancing, but recently, in a falling market, people | | | | the two options. |