Will My Home Be Foreclosed Now That Forbearance Has Ended
Though the forbearance period has ended for most borrowers, the CFPB and the Biden Administration have put new rules in place to prevent a massive wave of imminent foreclosures. Lenders are required to allow borrowers many options including:
If none of those options are possible for borrowers, there are still additional restrictions in place through Dec. 31, 2021. Lenders can only start the foreclosure process if the borrower has abandoned their property, has not responded to inquiries from the lender for more than 90 days , or was more than 120 days behind on their mortgage prior to the pandemic .
What Is A Cash
A cash-out refinance is the act of replacing your current mortgage with a new one. When you refinance your home, the new mortgage may have more favorable terms, such as a lower interest rate or a lower monthly payment. Refinancing is a popular option to pursue when interest rates drop.
A cash-out refinance is essentially a new mortgage with a home equity loan amount higher than what you previously owed on your old mortgage. Once the home equity loan is disbursed, the difference between your new loan amount and current loan balance goes to your pockets. This allows any borrower to use their home mortgage to get some cash.
You must have built equity on your home in order to cash-out refinance, and you must usually leave 20% of the equity in the home if you are going with an FHA or conventional loan.
Heres an example of a cash-out refinance at work:
Current Home Value: $200,000
Equity Left in the Home : $40,000
New Loan Amount: $160,000
Cash out: $60,000
You will have to factor in closing costs when determining your maximum cash out, but this gives you a general idea. VA loans allow you to get a cash-out loan for 100% of the home value.
The money that you pocket from a cash-out loan is considered debt, so it is tax-free. Many homeowners commonly reinvest this money back into their homes, using the funds for renovations and other home improvements.
Streamline Refinancing For Fha Va And Usda Loans
Popular mortgage relief programs since 2009 have only been available to homeowners with conventional mortgages backed by Fannie Mae or Freddie Mac.
But what if your loan is government-backed?
Homeowners with federally-backed FHA, VA, and USDA mortgages have access to different mortgage programs than those with conventional loans.
Namely, they can use a Streamline Refinance.
The Streamline Refinance is a special mortgage refi program for people with government-backed loans.
Its similar to a mortgage relief refinance, because you can use a Streamline Refi even if your home is underwater or has very little equity.
And a Streamline Refinance has other benefits, too.
- Theres less paperwork because you dont have to re-verify your income or employment or get the home appraised
- Government-backed loans typically have below-market mortgage interest rates
- Closing costs are typically cheaper
Homeowners can qualify for an FHA Streamline if theyve made at least three consecutive on-time payments on their existing FHA loan.
Even if you make your three consecutive payments while in forbearance, you may qualify for FHA Streamline refinancing. The Department of Housing and Urban Development , which oversees the Federal Housing Administration, is one of the more lenient housing agencies.
For a VA Streamline Refinance , the rules are more lenient.
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Emergency Supplemental Nutrition Assistance Program
The next program that will remain available in 2022 is the emergency support under SNAP.
It is also more widely known as food stamps.
At the start of the pandemic, the U.S. Department of Agriculture provided an additional $1billion per month in food assistance.
These funds have helped an estimated 25million people in low-income households put food on the table during this time.
The emergency SNAP benefits were originally due to expire at the end of September 2021, but a selected number of states are continuing to extend it.
Below is the list of states that are extending the emergency SNAP benefit, worth at least $95 extra, through January:
- Alabama
Eligibility For An Fha Loan
To qualify for a loan from the federal housing administration, you need to have an attractive credit score. This will make you eligible for getting a loan with an FHA-approved lender. Additionally, the cost of the home you would like to insure, and its location must be within the loan limit stipulated by the FHA in that location.
As long as you comply with these requirements, you can apply for an FHA loan. The loan is useful for homeowners and is the best form of stimulus for anyone that wants to purchase a new home.
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The Federal Stimulus Programs Will Be Extended Through 2022
Despite the fact that many government stimulus programs are ending this year, two remain. According to this post on Go Banking Rates, the first of these is a stop in federal student loan debt. Furthermore, on December 31, 2021, the Department of Education in the United States of America extended the federal student loan moratorium. This extension will extend through the beginning of May, and it will involve a halt to student loan collection, no interest accumulating during this time, and no collections on defaulted loans.
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Eligibility To Buy A Hud Home
The main qualifications to buy a HUD home usually depend on your current credit score. If you have a good credit score, you have a higher chance of getting the HUD home. You should also be capable of getting a mortgage and ready to make a down payment in cash. Additionally, you can also use an FHA-insured mortgage to purchase a HUD home.
The process is as simple as searching for a real estate property owned by the HUD on the internet. After your search, you should learn about the available properties and how much they are selling for.
Once you have discovered a property that matches your interests and preferences, you can easily make an application for the home and purchase it with the FDA-protected mortgage. The process itself is not difficult, and as long as you are eligible, you can have the home in less time, and there wont be many checks to go through before you get the property.
Mortgage rates are reducing in terms of interest, and with the rates at such a low level in history, more people are taking up the opportunity to purchase a property or a home.
Luckily, the government has put some programs in place to ensure that people can get protected and insured whenever they are making payments on their mortgage. These payments are always insured even if the buyer defaults on the payments.
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When Will Your Mortgage Debt Be Paid
This is a key question, given that the federal government lifted its moratorium on foreclosures of government-backed mortgages at the end of July. According to the state Attorney Generals Office, homeowners are still entitled to ask their lender for a debt-deferral deal that could keep them out of foreclosure for at least a few more months, but if your lender wont grant you forbearance, youll need help in a hurry.
A spokeswoman for the program said officials are hoping to get the aid flowing quickly the state has been running a pilot version of the program since August, so its not breaking new ground here, just scaling up. A key factor in how quickly your application can be processed is whether you provide all the necessary documents and attestations in a timely fashion.
Once your application has been granted, though, you wont be eligible for any further aid from the program.
Hiro: The Highltv Refinance Option
Editors Note: As of August 31, 2021, Fannie Mae paused the HIRO initiative because very few applicants were taking advantage of the program. It is likely the programs lack of use is due to rising property values and the resulting increases in home equity. You may find that you have more equity in your home than you originally thought due to recent increases in property values.
Fannie Maes HighLTV Refinance Option allows homeowners to refinance with no equity or an underwater loan. And theres no maximum LTV ratio.
However, only homeowners whose mortgages are currently owned by Fannie Mae can qualify.
Other conditions to use the high LTV refinance option include:
- Your loantovalue ratio is at or above 97.01 percent for a singlefamily home
- Your loan was originated on or after October 1, 2017
- You have a history of ontime mortgage payments
- You have no more than one late payment in the last year, and none in the last 6 months
And, importantly, you need a net tangible benefit to qualify for HIRO.
That means there must be a clear reason for your refinance whether its a lower monthly payment, a shorter loan term, or a switch from an adjustablerate mortgage to a safer fixedrate mortgage.
You can find out whether you meet the guidelines for a HIRO refinance by checking with a lender.
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Mortgage Options From Fannie Mae And Freddie Mac
Homeowners with conforming loans backed by Fannie Mae or Freddie Mac have options for mortgage relief.
If youre experiencing a temporary hardship, its not too late to ask about forbearance. Theres currently no deadline to make an initial forbearance request with your loan servicer.
In addition, Fannie and Freddie recently came out with new refi programs that make it easier and cheaper to lower your interest rate and mortgage payment.
Fannie Maes RefiNow and Freddie Macs Refi Possible are designed for low to moderateincome homeowners. You might qualify if you make average or belowaverage income for your area.
These refinance programs have unique benefits that can offer financial relief to homeowners, including:
- Lower mortgage rate and monthly payment
- Reduced closing costs with no appraisal fee
- Easier debttoincome qualification
These new loan options can offer big savings for homeowners who might not otherwise qualify to refinance.
What Is A Heloc
Home equity lines of credit are a revolving source of funds that you can access as you choose. HELOCs usually feature variable interest rates, depending on the lender.
HELOCs have two phases: the draw period and the repayment period. The draw period is usually 10 years. This is when you can access your available funds as you choose, and as little or as much as you may need. During this time, youll most likely only be required to make small, interest-only payments against what you borrow.
If you dont ask for an extension after the draw period, then you will enter the repayment period. Once in repayment, you can no longer access additional funds, and you must make payments to the principle, plus interest. The length of the repayment period varies, but most lenders have a 20-year repayment period. Depending on your lender, you may be offered different types of repayment options.
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Who Qualifies For Fha Cash
An FHA cash-out loan allows homeowners with lower credit scores or a less than impressive debt-to-income ratio to access the equity of their home at a current low rate.
The basic requirements to qualify for an FHA cash-out refinance are:
- The home mustve been refinanced but be your primary residence, and you must have lived in the home for at least 12 months prior to applying for the loan
- You must have made on-time mortgage payments for the past 12 months prior to applying for the loan
These are the basic requirements, but there might be additional requirements depending on your circumstances, such as your credit score.
FHA loans usually require a debt-to-income ratio of 43% or less, but different factors may affect this, such as a high credit score or high home equity.
As mentioned, your current mortgage does not have to be an FHA loan to qualify for an FHA cash-out refinance.
Who Is Eligible And How To Apply Explained
The fund is available for those who’ve experienced financial hardship after the pandemic initially hit the US.
To qualify, incomes must be 150% or less of the area median income or 100% of the median income for the US, whichever is bigger.
Plus, the homeowners mortgage balance must be less than $548,250.
How much you can get can vary by state and other factors, but qualifying households in Connecticut will be able to claim as much as $20,000.
While those in Illinois can soon apply for up to $30,000 per household.
According to the National Council of State Housing Agencies , states are working with the Treasury to finalize and implement their HAF programs “very soon”.
Some states are also using the funds they’ve received to set up pilot programs so they can start helping homeowners sooner.
To find out when your state is rolling out the support and how to get help, check the NCSHA website.
There is also another way to get mortgage relief – and thats through a federally-backed refinance program.
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Is There A Mortgage Stimulus Program
Theres no current mortgage stimulus program from Congress with that exact name, but federal funds have been made available to help homeowners.
This is known as the Homeowner Assistance Fund , which was part of President Joe Bidens American Rescue Act.
The fund provides nearly $10billion for states, the District of Columbia, as well as other US territories.
These funds can be used for assistance with mortgage payments, homeowners insurance, utility payments, and more.
Although the support comes from federal funds, the cash is sent out to states to then distribute it.
No Extra Penalties Interest Or Late Fees
During any forbearance period granted to you, your servicer cannot charge any penalties, interest, or fees that would not have been charged if you had made your payments on time and in full. Landlords may not charge tenants any fees or penalties for late payment of rent during any forbearance period granted to the landlord.
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Relief Refinance Programs: Hiro And Fmerr
Former relief programs from Fannie Mae and Freddie Mac, including the Enhanced Relief Refinance and the HighLTV Refinance Option , have been paused due to a low number of applicants.
These programs were largely designed to offer mortgage relief to underwater borrowers those who owe more on their mortgage than their home is worth. Thanks to rising home values nationwide, the number of underwater borrowers has shrunk dramatically.
As a result, many homeowners are eligible to refinance but just dont know it yet.
So if youre looking for a mortgage relief refinance, its still worth talking to a lender. There are a wide variety of refinance options available today, and you may well qualify for one of them.
Stimulus Checks For Homeowners: Heres Whos Eligible For The Economic Benefit
WASHINGTON DC – APRIL 2, 2020: United States Treasury check with US currency. Illustrates IRS tax refund or coronavirus economic impact stimulus payments to taxpayers affected by the pandemic. – pieces for Biden asf ShutterstockShutterstock
Millions are still receiving the third round of stimulus checks and plus-up payments, while parents with eligible co-dependents will start receiving the child tax credit in mid-July through mid-December. Theres another economic relief some Americans may be eligible for that they probably dont even know was a thing. Thats stimulus money given to some homeowners.
The American Rescue Plan, which included the third round of stimulus checks was signed into effect by President Joe Biden on Thursday, March 11. The following week millions of eligible Americans were deposited $1,400.
The Homeowners Assistance Fund is part of the bill, which will help homeowners struggling with their mortgages. The fund includes helping those who face delinquencies and foreclosures, due to the economic crisis caused by the coronavirus pandemic.
The IRS furthermore states the fund provides:
A minimum of $50 million for each state, the District of Columbia and Puerto Rico
$498 million for Tribes or Tribally designated housing entities and the Department of Hawaiian Home Lands
$30 million for the territories of Guam, American Samoa, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands
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How To Request Emergency Rental Assistance
Because the Treasury disburses ERA funds to states and other entities, you must apply for ERA assistance through the appropriate state or entity. To help with this, the Treasury has created a webpage to help tenants and landlords find rental assistance programs in their local area. Use it to direct yourself to the appropriate state or other authority to determine how to apply to receive assistance or to help your tenants do so.
Types Of Reverse Mortgages
- Federally Insured Reverse Mortgages – Known as Home Equity Conversion Mortgages
- Proprietary Reverse Mortgages
- Single Purpose Reverse Mortgages
When finding a lender remember:
- Be suspicious of anyone claiming that you can own a home with no down payment
- Seek out your own reverse mortgage counselor
- Never sign anything you do not fully understand
- Make sure the loan is federally insured
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When Will The Program End
There is no set date instead, the state will continue to offer help to homeowners who became delinquent in 2020 and 2021 until it has spent all $1 billion from the federal government, a process thats expected to take three years. The state estimates that the money will be enough to help 20,000 to 40,000 borrowers.
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The money will be awarded on a first-come, first-served basis, with one important exception: Forty percent of the aid must go to socially disadvantaged homeowners. Those are residents of the neighborhoods most at risk of foreclosure, based on the Owner Vulnerability Index developed by UCLAs Center for Neighborhood Knowledge.