MHA Calculator & FAQ: Qualification Requirements? How Long Does it Take?
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MHA Calculator & FAQ: Qualification Requirements? How Long Does it Take?

In May 2009 President Obama signed the Making Home Affordable Act, which is designed to help homeowners stay in their homes and reduce the rate of foreclosures across the coutnry. In Obama's words:

"These landmark pieces of legislation will protect hardworking Americans, crack down on those who seek to take advantage of them, and ensure that the problems that led us into this crisis never happen again," said President Obama.

The Making Home Affordable act gives homeowners more options and flexibility with loan modifications - basically, taking an underwater mortgage and restructuring the terms to make it affordable to the borrower. So far, over 10 million mortgages have undergone modification, saving millions of homeowners hundreds if not thousands on their monthly mortgages, and enabling them to stay in their homes. The act makes it tougher for predatory lenders to take advantage of borrowers who are caught in tough financial situations.

How Can I Benefit?

There are three principle ways in which the MHA Act can benefit you:

  1. Rate reduction and term extension
  2. Principal balance shifts and Principal balance reductions
  3. Adjustable rates converted to fixed rates. Incoporation of Late Payments into Principal Balances.

Anyone can submit for a loan modification now. It used to be that you had to be at least a month behind in your payments, but that is no longer the case. This sounds horrible, but I’ll say it anyway. The worse your situation is, the better off you are for a Loan Mod. The speed in which your Modification is handled is measured by the degree of your particular hardship.

Am I Eligible?

Basically, if you have any kind of financial hardship relating to your home loan, you are eligible. If you are upside down (the property value is less than your loan amount), that’s a hardship. Other criteria: Adjustable Interest Rates. High Interest Rates. Neg. Am Loans. Monthly Deficits. Negative Equity. Ballon Loans. General Hardships. Can’t Refinance. Loss of Income. Divorce. Medical Bills. Incarceration. Etc. You can also check your eligibility here.

Another added benefit is that when you’re in the process of modifying your loan via the MH`A, you do not have to make your monthly payments.

How Do I Apply?

You can work with a real estate professional in your area, or you can use one of the online services. A good first step is to use an online MHA mortgage calculator to see how much you can save based on your situation. Once you get a general sense for your eligibility and how much can you save you can go ahead and apply with an online service or contact a local service provider.

How Long Does The Process Take?

The process can be quick, 2-3 weeks from start to finish, depending on your situation. However, the process was designed to aid homeowners in trouble, with the understanding that many are in time-sensitive situations. The hardest part is getting started, but hopefully this guide gives you a head start.

Additional notes on the major sections of the Making Home Affordable (MHA) legislation:

  • Enables tougher legal enforcement against companies engaging in mortgage fraud: This law will expand the Department of Justice’s authority to prosecute mortgage fraud involving private mortgage institutions under a variety of statutes, including 18 U.S.C. § 215 (financial institution bribery); 18 U.S.C. § 225 (continuing financial crimes enterprise); 18 U.S.C. § 1005 (false statement/entry/record for financial institution); and 18 U.S.C. § 1344 (bank/financial institution fraud). The bill changes the definition of "financial institution" to include private mortgage brokers and other non-bank lenders will enhance our ability to prosecute criminals under the bank fraud statute who commit fraud involving loans from those companies.
  • Prohibits price manipulation of mortgages: The new law changes the mortgage applications statute (18 U.S.C. § 1014) to make it a crime to make a materially false statement or to willfully overvalue a property in order to influence any action by a mortgage lending business. Currently, the offense only applies to federally-regulated institutions.
  • Establishes protections for renters living in foreclosed homes: One of the often overlooked problems in the foreclosure crisis has been the eviction of renters in good standing, through no fault of their own, from properties in foreclosure. To address the problem of these tenants being forced out of their homes with little or no notice, this legislation will require that in the event of foreclosure, existing leases for renters are honored, except in the case of month-to-month leases or owner occupants foreclosing in which cases a minimum of 90 days notice will be required. Parallel protections are put in place for Section 8 tenants.
  • Establishes right of a homeowner to know who owns their mortgage. Often mortgage loans are sold and transferred a number of times. Borrowers often have difficulty determining who owns their loan, and who to contact with questions, problems or complaints about their loan. This legislation requires that borrowers be informed whenever their loan is sold or transferred, so that they will always know who owns their loan.
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Comments (5)

You are telling the truth that we can't get much help the better our income is and payments are. I want to also to lower my payment but I don't want to ruin my credit and be behind to do this. They make it sound easy to do this but want your credit to be bad so we can't buy anything else. Sounds like the government is trying to get everyone to totally depend on them for everything so we won't be able to make our own decisions about how we live. I have about 12 years left on my house but now only one of us is working and our house payment is bigger since only one is paying for it. With two working it wasn't bad. We tried to get our payments lowered but we had to go back up to a 30 year loan which would be crazy to do. This is where they get people. They offer things to us if we don't use them so they would look good. Don't get me wrong, in some cases this was great for some people, it kept them from losing their homes, but others struggle also in this crazy economy we are livjng in today and need the some help also that they can't get. Very good topic to write on during this economy. The lastest news is 85,000 more just lost their jobs just in December alone. Pray for our country and for all those who are out of jobs and looking for new ones.

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denver

This is really good

Excellent. Sorry, I am out of votes

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