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We want to participate in the government's loan modification program and have been advised to skip several mortgage payments to qualify. Is this necessary?
No. Deliberately missing payments will just make things worse.
The government's Making Home Affordable plan (www.MakingHomeAffordable.gov) offers several options to homeowners:
Home Affordable Refinance Program
For those who want to refinance but have insufficient equity to qualify for a new loan.
Home Affordable Modification Program
For those who face a higher mortgage rate because they have a toxic loan or have suffered a significant income decline.
Home Affordable Unemployment Program
For those who have lost their job.
Second Lien Modification Program
For borrowers with a second lien they can no longer afford.
The Home Affordable Foreclosure Alternatives Program
For borrowers who have not gotten a modification or have been unable to make payments with a modified loan. Results in a short sale or a deed-in-lieu of foreclosure.
Under HARP, the government says you may be eligible if you have a residence with one to four units, the loan is guaranteed by Fannie Mae or Freddie Mac, the first mortgage does exceed 125 percent of the debt, you have sufficient income to support the new loan and you "are current on your mortgage payments and have not been more than 30 days late making a payment within the past 12 months."
To qualify for HAMP, the government says "responsible homeowners who are struggling to remain current on their mortgage payments are eligible if they reasonably believe they are very likely to default on their mortgage soon (often called 'imminent default')."
Under UP, the borrower can qualify if "delinquent, or default is reasonably foreseeable." In other words, you can be current on your loan.
Speak with your servicer, an attorney or a community-housing group for details.
Peter G. Miller is the author of The Common-Sense Mortgage and a veteran real estate columnist. Have a question? Please write to firstname.lastname@example.org.View Foreclosure Article Archives
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