A Defensive Tool: Continuing Viability of Mortgage Assistance and Loan Modification Programs

Last updated on: May 24, 2022

Homeowners facing foreclosure often wonder what options they have to defend themselves. Once served with the foreclosure lawsuit, the first step should be to contact an experienced foreclosure defense attorney in order to file an immediate and timely response to the foreclosure complaint. Part of a strong and creative defense strategy, however, can also include incorporation of a homeowner’s loan modification application. With constant communication between the defendant-homeowner, defense counsel, and counsel for the foreclosing bank, a pending complete application can be used as a strategic tool during litigation, gaining the defendant time within the litigation to work out possible settlement options with the bank, as well as resources such as mediation or a conciliation conference used to properly process the application.

Related: Will Bankruptcy Stop Foreclosure?

Although the government program HAMP (Home Affordable Modification Program) expired on December 31, 2016, various mortgage assistance options remain available for homeowners. First, mortgage servicers continue to offer proprietary modification programs, meaning that homeowners can apply for the servicer’s own in-house programs. Previously, applying homeowners had their applications go through a multi-tiered process, first being processed for HAMP, then being processed for in-house modification programs. The loan modification application process is now less cumbersome, since the servicer is only evaluating the application for eligibility under their proprietary modification programs. While each servicer’s in-house modification programs vary, government sponsored entities Fannie Mae and Freddie Mac have been encouraged by the Consumer Financial Protection Bureau to focus on alternative post-HAMP borrower relief programs, and have implemented such programs with continuing success.

Related: How Will the Closing of the Rocket Docket Era Affect Florida Foreclosure Cases?

Homeowners facing foreclosure of a reverse mortgage may be eligible for assistance through the Florida Hardest-Hit Fund Elderly Mortgage Assistance (ELMORE) program. Using money allocated to Florida through the Florida’s Hardest-Hit Fund, the ELMORE program was designed to assist senior homeowners with a reverse mortgage to remain in their homes by providing eligible borrowers up to $50,000 to bring their property taxes, homeowner’s insurance, flood insurance, homeowners or condo association dues current, to the extent that these property charges have been paid on behalf of the senior homeowner by the servicer of their reverse mortgage. The eligible senior homeowner may also be eligible to have up to 12 months of future property charges paid on their behalf, as well.

Related: Foreclosure Stripping

Finally, for those homeowners who have remained current on their Fannie Mae or Freddie Mac mortgage but have no equity in their homes, the federal HARP program, set to expire on September 30, 2017, may be an option that will allow the owner to lower their payment significantly by refinancing the loan with no additional mortgage insurance and no minimum credit score. Through HARP, you can get a lower interest rate (which means less out-of-pocket costs each month), get a shorter loan term, or change from an adjustable to fixed-rate mortgage.

Related: Who Is A Mortgage Loan Servicer?

Experienced mortgage foreclosure counsel at Charlip Law Group, L.C. know how to manage foreclosure litigation in order to achieve maximum benefits for homeowners, including understanding potential mortgage assistance options that may be available to provide a permanent solution to the foreclosure action. We offer a comprehensive approach to foreclosure defense, intertwining litigation with the many settlement options available through loan modification and borrower assistance programs, achieving positive results for our clients.

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