Mortgage Refinancing Programs to Avoid Foreclosure

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Home Affordable Refinance is a new federal government program that makes it possible for homeowners with little or no equity in their homes to refinance their mortgage loans at lower rates to save money. It is a temporary program, scheduled to end in June 2010.

Home Affordable Refinancing allows homeowners who lost equity when their homes dropped in value to take advantage of the current low interest rates. The program is for homeowners with satisfactory credit who have been making their loan payments on time. Under the program, homeowners can refinance to a 30-year or 15-year fixed rate loan at market interest rates.

For details about Home Affordable Refinance, including eligibility, benefits, and how to apply, see Making Home Affordable Refinance Program.
 

Home Saver is a refinancing and counseling program for Massachusetts homeowners who cannot afford their current mortgage loan, but are not more than 30 days late in payments. Home Saver provides fixed rate loan refinancing for owners of single-family homes, condominiums, and multi-family homes (up to 4 units).

Homeowners must meet income limits, credit score minimums, and other requirements, and must attend mandatory homeowner counseling. For more information, see Home Saver Foreclosure Prevention Program on the MassHousing web site.

To apply:

• call the Homeowner's HOPE Hotline at 1-888-995-HOPE
• or call a Home Saver participating lender

HOPE for Homeowners (H4H) is a federal refinance program to help homeowners at risk of foreclosure. H4H allows homeowners to refinance their unaffordable loans into 30- or 40-year fixed rate loans with lower payments. New loans are insured by the Federal Housing Administration (FHA). The program is in effect from October 1, 2008 to September 30, 2011.

You may be eligible for H4H refinancing if:

• Your current loan originated on or before January 1, 2008
• Your current loan payments are more than 31% of your gross monthly income
• You live in the house and do not own any other real estate
• You did not lie on the application for the loan you are refinancing (for example, overstating your income)
• You cannot afford your current loan and did not default on the loan on purpose
• You have not been convicted of fraud within the past ten years

The new loan is limited to 96.5% of the current appraised value of your house, but not more than you can afford. If your current lender does not agree to accept the buyout amount, you cannot refinance with H4H. If you have a second mortgage or equity loan, those lenders must also agree to the refinancing.

If you are able to refinance with H4H, you must pay for the FHA insurance. If you sell or refinance the house, you must share some of the profits with the federal government.

To apply for HOPE for Homeowners refinancing, you can call:

• your current lender
• any FHA-approved lender
• a foreclosure counseling service
• Homeowner's HOPE Hotline at 1-888-995-HOPE

Web site: HOPE for Homeowners
 

NACA is a national non-profit advocacy and homeownership organization. NACA's Refinance Program offers new loans to eligible homeowners with unaffordable mortgages. NACA's Home Save program gives counseling and financial assistance to eligible homeowners who are at risk of foreclosure. All services are free.

NACA's Information and Refinancing Services line: 1-888-302-NACA
Web site: NACA Home; NACA Office Search