Making Home Affordable Extension Programs–What Assistance Programs Are Available Beyond Modifications?

Homeowners who are having difficulty making their mortgage payments often are in various situations which have led to these troubles. Also, in some instances, traditional home loan modifications may be unhelpful or may not be enough to help a homeowner avoid the loss of their home through foreclosure. Yet, it’s for this reason that extension programs from the Making Home Affordable initiative had been offered to aid homeowners who are having trouble and may need further help.

Extension programs are usually offered by some of the top financial institutions in the Making Home Affordable Program, as many mortgage servicers can offer second lien modifications, unemployment forbearance assistance, or foreclosure alternative plans like short sales and the deed in lieu of foreclosure options.

Some homeowners have had trouble with a primary modification due to factors related to their second mortgage, but a second lien modification plan may help homeowners find more affordability with their overall mortgage payment, if modifying a primary home loan payment is unhelpful.

Also, unemployment is seen by many to be one of the biggest hurdles homeowners must overcome when facing difficulty with their mortgage. Obviously, some homeowners have simply lost their job outright, while others may have only seen a cutback in their wages at their place of employment. Individuals living on a reduced income have benefited from home loan modifications, since they can offer more affordable payment plans, but homeowners who are simply relying on unemployment benefits may not qualify for these modification plans. Yet, the Home Affordable Unemployment Program may offer forbearance plans for these unemployed homeowners while they continue to seek employment or make alternative living arrangements.

Yet, some homeowners who may be facing unemployment are simply unable to find the assistance they need and have used deed in lieu of foreclosure plans as a way to surrender the deed to their home without having to go through a formal foreclosure process. While these deed in lieu of foreclosure plans are not a homeowner’s first choice, they can offer assistance to homeowners who face the inevitable loss of their home by allowing them to escape their mortgage obligation without foreclosure. Also, some homeowners have been given relocation assistance with these foreclosure alternative plans, which obviously has helped with moving costs.

However, in areas where property values have fallen, many homeowners turn to short sale opportunities as a way to escape a negative equity situation which could be causing financial problems in their life. Some servicers have been hesitant to offer short sales, but there have been homeowners who were able to find buyers for their underwater home and, despite selling a home at a loss, have been free from this type of mortgage obligation.

While traditional modifications are said to have had mixed results over the past months, there have been homeowners who benefited from these plans and gained the affordability they needed in their monthly mortgage obligation. Understandably, modifications and extension programs are no guarantee when it comes to preventing foreclosure, but homeowners have been prompted to explore these various options if financial troubles arise so that they may find a solution to their mortgage payment problems.