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Housing Crisis Programs

Posted in: Homeownership

The home-mortgage crisis in the United States has spawned problems in the mortgage, real-estate and banking industries, and many consumers now face mortgage-payment increases in the coming months that could cause the number of foreclosures to climb even higher. Here are two valuable resources for consumers in need of help with their mortgage situation.

Hope Now

Hope Now is an alliance between large banks, counselors, services, and other critical industry supporting organizations with the sole purpose of trying to keep people in their homes and to mediate any foreclosure threats. The Department of the Treasury and HUD supported the formation of this alliance to encourage responsible business practices and to help avoid further down turns in the housing market.

This program began at the end of 2007 and is designed to assist customers with sub-prime mortgages who can afford their current payment, but will struggle or not be able to afford the mortgage payment when the rate adjusts on their ARM.

The plan will allow these homeowners to: refinance an existing loan to a new private mortgage, move to a FHA secure loan or freeze their current interest rate for 5 years.

  • Applies to mortgages issued 1/1/2005-7/31/2007 with scheduled increases from 2008 to mid-2010.
  • Borrowers must live in their home.
  • Borrowers must be current on their payments and not have missed more than one payment in the past 12 months.

Project Lifeline

Project Lifeline is the newest program developed in conjunction with mortgage lenders to help homeowners who are facing foreclosure. The initiative is a step-by-step approach for homeowners who are 90 days or more behind in their mortgage payments; a circumstance that already puts them in serious risk of losing their homes. The program is not a solution to the housing crisis but is considered a “pause” in the foreclosure process, giving homeowners an extra 30 days to work out a payment or modification program.

The plan will delay foreclosure proceedings for 30 days allowing homeowners to have time to contact their lenders and see if they can catch up on the past due payments, refinance, short sell the home or modify their loan.

  • Homeowners must be at least three months past due.
  • Not just for people with subprime loans.

For both programs homeowners can contact: HOPE NOW 1-888-995-HOPE (4673) 24 – hours a day.