Home Assistance for Veteran Caregivers

I am not a lawyer, a realtor, or financial adviser. I am a caregiver of a disabled Veteran, as many of you are. Several years ago my husband lost his job. A few months later, he had two Transient Ischemic Attacks (TIA’s) and developed other medical problems. In the meantime, we were concerned about losing our home. Also, we got behind on our car payments and utility bills, and credit debt started to mount. We were not able to pay our mortgage and were about to become homeless. Since I am disabled and cannot work, this caused even more stress. I called the mortgage company and made an appointment to discuss our options. This company was more concerned about the past-due mortgage payments being paid ASAP than any arrangements. As I stated before, my husband lost his job, and we were not able to pay our mortgage. They foreclosed on our home, which caused us to lose our car and damaged our credit. Recently, I have been doing research to see how I can help others prevent similar losses. There are several programs that can assist, such as:

1. Assistance for Unemployed Homeowner

Home Affordable Unemployment Program (UP)

If you are having a tough time making your mortgage payments because you are unemployed, you may be eligible for the Home Affordable Unemployment Program (UP). UP provides a temporary reduction or suspension of mortgage payments for at least twelve months while you seek reemployment.

  • You may be required to make a partial payment, not to exceed 31 percent of your verified monthly gross (pretax) income including unemployment benefits.
  • You will be evaluated for a HAMP (Home Affordable Modification Program) at the end of your UP forbearance (deferment) period if it is available at the time.

UP is not currently available for homeowners with mortgages held by Fannie Mae and Freddie Mac; however, both have their own forbearance arrangements for unemployed homeowners. Please contact your mortgage company to see if you are eligible.

You may be eligible for UP if you meet all the following criteria:

  • You are unemployed and eligible for unemployment benefits.
  • You occupy the house as your primary residence.
  • You have not previously received a HAMP modification.
  • You obtained your mortgage on or before January 1, 2009.
  • You owe up to $729,750 on your home.

These criteria are for guidance only. Contact your mortgage company to see if you are eligible for UP.

FHA Special Forbearance (Federal Housing Association)

If you are having difficulty making your mortgage payments because you are unemployed and have no other sources of income, you may be eligible for FHA’s Special Forbearance. FHA now requires servicers (mortgage companies) to extend the forbearance period, by offering a reduced or suspended mortgage payment for up to twelve months, for those who qualify.

2. Managed Exit for Borrowers

Home Affordable Foreclosure Alternative (HAFA)

If your mortgage payment is unaffordable and you are interested in transitioning to more affordable housing, you may be eligible for a short sale or deed-in-lieu of foreclosure through HAFA SM. HAFA provides two options for transition out of your mortgage: a short sale or a deed-in-lieu (DIL) of foreclosure. Recommendation: Always speak with an attorney before approaching your mortgage holder with a deed-in-lieu of foreclosure. He or she will help you prepare your papers, in your best interest, and it saves the lender time and money.

In a short sale, the mortgage company lets you sell your house for an amount that falls short of the amount you owe.

In the DIL, the mortgage company lets you give the title back, transferring ownership back to it.

Benefits of HAFA

Unlike conventional short sales, the HAFA completely releases you from your mortgage debt after you sell your home. This means that you will no longer be responsible for the amount that falls short, the amount you still owe. The deficiency is guaranteed to be waived by the servicers.

In a HAFA short sale, your mortgage company determines an acceptable sale price.

HAFA has a less negative effect on your credit score than a foreclosure or conventional short sale. When you close, HAFA may provide $3,000 in relocation assistance.

You may be eligible of HAFA if you meet the following criteria:

  • You have a documented financial hardship.
  • You have not purchased a new home within the last twelve months.
  • Your first mortgage is less than $729,750.
  • You obtained your mortgage on or before January 1, 2009.

You must not have been convicted in the last ten years of felony larceny, thief, fraud, forgery, money laundering, or tax evasion in connection with a mortgage or real estate transaction. Eligibility criteria are for guidance only. Contact your mortgage company to see if you qualify for HAFA.

I hope this information is helpful for those of you who need answers ASAP. There will be a part two for those who have decided to file bankruptcy. Later I will send information to help those whose homes are underwater (a loan with a higher balance than the free-market value of the home). For more information, contact the Making Home Affordable Program, 1-888-995-HOPE (4673), www.makinghomeaffordable.gov.


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