By now, everyone has heard about the $700 billion bailout for banks and other institutions that have gotten into trouble with bad mortgage debt. But what is being done directly for the homeowner? Here are three programs that can help North Carolina residents facing possible foreclosure:
HOPE for Homeowners Program
This federal program went into effect October 1, 2008. It offers a way to help homeowners convert subprime high interest loans into FHA fixed 30 year mortgages. But it comes with lots of qualifications, including:
- Loan must have originated before January 1, 2008
- Mortgage payment must exceed 31% of homeowner gross monthly income
- Lender must agree to reduce upside down loans to 90% of home value
- Second lender (who may get nothing) must also agree to terms
- Homeowner must share future house profits with FHA
Go to this nolo.com website for many more details. While many lenders may refuse to write down loans if they can lose a significant amount of money, in some cases it is preferable to the losses that come from foreclosure. Speak to your lender to see if a workout is available.
State Home Foreclosure Prevention Project
This North Carolina state law can help homeowners with delinquent mortgage payments. It requires your mortgage servicer to notify you and the Commissioner of Banks 45 days before starting the foreclosure process. The Commissioner's office has the authority to require a 30 day extension to the foreclosure to enable a workout between the lender and homeowner, and has a staff available to review the loan for predatory characteristics.
North Carolina Foreclosure Prevention Fund
The N.C Foreclosure Prevention Fund™ helps North Carolina homeowners who are struggling to make their mortgage payments due to job loss or temporary financial hardship. For qualified homeowners, the Fund can provide an interest-free loan of up to $36,000 to pay your mortgage and other related expenses for up to 36 months while you search or retrain for new employment. The loan can also be used to bring your mortgage current. If you are currently employed but have a second mortgage that is unaffordable because of a prior job loss or reduced income, the Fund offers an interest-free loan of up to $30,000 to pay off your second mortgage. We offer the Fund in partnership with the N.C. Housing Finance Agency using funds from the U.S. Treasury. The Fund provides assistance at no cost to you. To learn more about the N.C. Foreclosure Prevention Fund™, go to www.ncforeclosureprevention.gov
We offer this loan program through our CCCS division and serve Wake, Johnston, Durham, Orange, and Chatham counties. Come to an information session for an in-depth explanation of the program - all sessions are held on Thursday mornings from 10 am to 11:30 am.
Triangle Family Services is HUD-approved and is on the list of agencies certified to help with each of these programs. Make an appointment at 919-821-1770 to speak to a certified housing counselor about all options available to homeowners in trouble.
