The Obama Mortgage
What You Should Know About This Program?
The U.S. government has created several programs aimed at helping borrowers in financial trouble avoid foreclosure, stay in their homes, and make their mortgage payments more affordable. Some use a catch-all term, “Obama mortgage” to describe one or more of these programs. What is an Obama mortgage? How does the government offer help to borrowers who are worried about their mortgage payments?
The term “Obama mortgage” has, for better or worse, been applied by some to one or more of the following. You’ll find that there’s one program that’s directly referred to as an Obama mortgage-the Making Home Affordable program.
The official government website for Making Home Affordable has a list of options for borrowers who need mortgage help. Choosing the right program depends on your needs. Here’s a list of the programs found at the Making Home Affordable Website:
The Home Affordable Modification Program (HAMP)
This program is described on the official site for borrowers who want to lower monthly mortgage payments, "making them more affordable and sustainable for the long-term".
The Home Affordable Refinance Program (HARP)
The HARP program is for homeowners who are current on mortgage payments but, “have had difficulty refinancing”. The official site says that even for borrowers who are “underwater” on their mortgages (owing more than the home is currently worth on the housing market), if mortgage is owned by Fannie Mae or Freddie Mac, HARP could be of assistance.
Home Affordable Foreclosure Alternatives (HAFA)
According to the official website, HAFA “provides homeowners the opportunity to exit their homes and be relieved of their remaining mortgage debt through a short sale or a deed-in-lieu of foreclosure (DIL). It also provides homeowners with $10,000 in relocation assistance”.
Home Affordable Unemployment Program (UP)
This program is designed to temporarily lower or suspend a qualifying borrower’s monthly mortgage payment, “giving you some much needed breathing room while you search for your next job” according to the official site.
Each of these programs has specific criteria borrowers will need to meet in order to qualify. Some programs require you to be current on your mortgage and apply before missing payments, etc. Othes may be available for those who have fallen behind on mortgage payments. Some of these programs will help borrowers keep their homes and stay in them, while at least one is designed as a short sale/foreclosure avoidance plan.
You can view specific details of these programs and more at the Making Home Affordable official site.
SEE YOUR CREDIT SCORES From All 3 Bureaus
Do you know what's on your credit report?
Learn what your score means.
FHA Loan Articles and Mortgage News
March 4, 2020 - There are some misconceptions about down payment grants in general, but one of the biggest is that the FHA itself or the lender is somehow responsible for managing or offering these grants. You, the borrower, are responsible for locating the programs in your area.
February 9, 2020 - Veterans have multiple options when it comes to deciding which type of One-Time Close construction loan to choose from. Military members who cannot occupy the home due to active duty requirements are still eligible for maximum financing.
January 25, 2020 - The FHA down payment can be as low as 3.5% of the adjusted value of the home. Compare that to the conventional loan 20% down requirement and it’s easy to see why FHA loans might be more appealing. Smaller down payments make sense if you don’t plan to keep the home long-term.
January 23, 2020 - Some borrowers who work on their credit long before applying for a loan may be eligible for the best down payment terms. You may be required to make a larger down payment if your credit score is too low. Work on your credit aggressively, and as early as possible.
January 15, 2020 - Some borrowers are, and some are not--much depends on the nature of your mortgage transaction. UFMIP is always required on FHA loan transactions and must be paid either in cash at closing time or must be financed into the loan amount.
