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Dec. 30th Deadline for Federal Mortgage Relief for Homeowners

Posted on in Estate Planning

b2ap3_thumbnail_house.jpgBy Russell J. Karnes

The time to act for Wisconsin homeowners struggling to make their mortgage payments is now! This is because the deadline to apply for the federal government’s long-running Making Home Affordable Program (MHA) Home Affordable Modification Program (HAMP) expires at the end of this month, on December 30, 2016.

Attorney Russell J. Karnes at GRGB says that homeowners faced with this concern need to act before December 30, 2016, if they want to take advantage of this federal assistance program, and should consult with legal counsel about their options or if they have questions on how to proceed.  Russ is experienced in mortgage loan, lending, foreclosures and consumer law, and points out a recent article that provides a very good overview and how-to on the subject.

The article, written by Attorney Rebecca Unruh, who is with the Federal Trade Commission’s Division of Financial Practices, sets out the necessary steps one needs to take in order to apply for relief under HAMP.  The link to the FTC article is found at - - https://www.consumer.ftc.gov/blog/struggling-make-your-mortgage-payments

How to apply for Mortgage Payment Relief?

First, determine if you are eligible for assistance. If you are behind on or struggling to make your mortgage payments, and your lender is participating in HAMP, you qualify to apply for assistance. Visit the Making Home Affordable website for more information.

Next, gather all your financials. You’ll need your most recent bank statements, paystubs, profit-and-loss statements (if self-employed), tax returns, etc. Your lender needs a complete financial snapshot to determine your eligibility for assistance. Find a complete list of necessary documents here.

Then, complete the necessary forms required by your lender. Find the Uniform Borrower Assistance Form (Form 710) here.

Finally, submit your completed application to your lender. Reference your loan number on every page of your application so your documents stay together. 

What happens next?

Remember, a HAMP application does not guarantee assistance. Your application needs to be complete before your lender will consider it on the merits. Stay in close contact with, and pay attention to correspondence from your lender. Follow up on your application at least once per week (the squeaky wheel gets the grease!). Your lender may ask you to provide additional documents. Be patient with and responsive to their requests.

After your lender reviews your completed application and determines that you qualify for assistance, you will most likely be offered a trial modification or Trial Period Plan (TPP). You must make all of your TPP payments, usually three, to be eligible for a permanent modification. If you make all your payments and comply with the other terms of the TPP, your lender must offer you a permanent modification.

A permanent modification can lower your monthly mortgage payment, but be sure to review the details! A lower payment often means a longer term (up to 40 years), and a higher or deferred (balloon) principal balance, which becomes due at the end of your loan.

You may not qualify for a modification if your lender determines that your loan is already considered affordable (payment is already below 31% of your gross income), or if you don’t make enough money to support an affordable payment. If your lender can’t modify your loan, you can consider negotiating alternatives like a short sale or deed in lieu of foreclosure.

What happens if you miss the December 30, 2016 deadline?

You may still be eligible for assistance directly through your lender, or through other Government programs. For example, the Home Affordable Refinance Program (HARP) was extended through September 30, 2017.  The HARP program is designed to assist homeowners whose properties are seriously underwater, but who may not otherwise qualify for mortgage assistance because they are current on their loan.

Beware of Scammers who charge a fee!

Wisconsin residents have been victimized by out-of-state scammers who claim they can save your house for a fee. You should not have to pay a fee to a third party for mortgage assistance. However, if you want help negotiating with your lender, feel that your lender has treated you unfairly, or think that you have been the victim of a scam, you should consult with experienced Wisconsin attorneys who have dealt directly with these issues.

At Gimbel, Reilly, Guerin & Brown, LLP, we understand how stressful and complicated consumer law, lending, financing and property cases can be.  Backed by more than 40 years of experience, our Milwaukee lawyers fight aggressively to defend your rights and property, and will always try to obtain the most favorable outcome practical for your situation.   Get the skilled representation you deserve.   Call 414-271-1440 and schedule a consultation today.

Sources:
https://www.consumer.ftc.gov/blog/struggling-make-your-mortgage-payments
https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-New-Streamlined-Refinance-Offering-for-High-LTV-Borrowers-HARP-Extended-through-September-2017.aspx

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