If you want to keep your home and your income problem is temporary, talk to your lender about these FHA workout plans. While the options listed here are for borrowers with FHA-insured loans, most lenders offer similar workout plans designed to help you keep your home. Even if you don't expect your income to increase in the near term they may be programs available that lower your over all payments to an affordable level. Speak to a modification attorney, specialist, or HUD housing counselor for more information.
HUD represents your the following as your options:
Special Forbearance. Your lender may provide for a temporary reduction or suspension of your payments to allow you time to overcome the problem that reduced your income. Then you may be offered a payment plan so you can pay back the missed payments a little at a time until you are caught up.
Mortgage Modification. A modification is a permanent change to your loan through which the overdue payments may be added to your loan balance, the interest rate may be changed or the number of years you have to pay off the loan may be extended.
Partial Claim. This is a one-time loan from the FHA insurance fund to bring your mortgage current. The loan is interest free and does not need to be repaid until you pay off your first mortgage or sell your house. This option is only available to borrowers with FHA-insured loans. However, if you have a conventional loan, ask your lender if they offer an “advance claim.”
FHA-Home Affordable Modification Program (FHA-HAMP). This option combines an enhanced partial claim with a loan modification. Under the FHA HAMP, the partial claim loan from FHA will not only include any amounts necessary to bring your mortgage current but may also include an amount to reduce your existing loan balance by up to 30%. The reduced loan balance will then be modified to lower your monthly mortgage payment to an affordable level. As described above, the partial claim loan is interest free, but must be repaid when you pay off your first mortgage or sell your house.
To qualify for any of these options, you will need to provide your lender with current information about your income and expenses. Also, your lender may suggest that you agree to a payment plan for three or more months to demonstrate your commitment before you are approved for a modification or partial claim.
It is important not to lie to the lender or the government, however there are instances where items can be stated in certain ways to help your situation. It may be advantageous to speak with an modification attorney, modifications specialist or HUD housing counselor before submitting information.
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