It's easy to get bummed out by the bum housing market. It's not so easy for homeowners to find out what kind of help is available to them.
Foreclosure is a raw deal for both banks and homeowners, and many lenders have sought alternatives that dodge the court system and cost of repossession while still buoying their bottom line.
That can be a gift for homeowners looking to sell their homes or pay less every month toward their mortgage.
The following programs from the federal government and the nation's banks promise to lower payments, offer cash incentives and keep people in homes.
But they're not cure-alls, and many come with specific tradeoffs, including credit hits, losing equity or sacrificing the deed to your home.
Some of these programs have over-promised and under-delivered, and each has strict rules to qualify. Your results may vary. But with patience, persistence and a healthy helping of luck, you just might win good news or a nice surprise.
If you're making your mortgage payments but are underwater
Home Affordable Refinance Program
Deadline: Dec. 31, 2013
If you're making all your payments but your home's value is less than what you owe, you might have been slapped around by banks not agreeing to refinance your loan.
But if Fannie Mae or Freddie Mac bought or guaranteed your loan before June 2009, you could qualify for the big dog in federal interest-rate relief: the Home Affordable Refinance Program.
HARP had a weak showing after its unveiling in 2009, helping millions fewer homeowners than promised. But its retooled version, HARP 2.0, has become one of the biggest federal mortgage programs yet. Figures from July, the most recent available from the Federal Housing Finance Agency, show that 60 percent of all Florida refinancings came thanks to HARP.
Compared to conventional refinancing, HARP is promoted as quicker, cheaper and containing fewer frustrations, such as no need for a new physical appraisal.
You won't get the lowest interest rates out there: most HARP loans bottom out at 4 percent. And not all banks participate in the program, so you might need to shop around.
For more information, call Making Home Affordable at 1-888-995-4673.
Refinancing with FHA
If you're underwater and current on your mortgage but not guaranteed by Fannie or Freddie, you could still be in the running for a lower interest rate from the Federal Housing Administration.
If your mortgage was insured by FHA before June 2009, and you've been diligent about your payments for the last year, you might be able to qualify.
Refinancing with FHA is promoted as quick and painless, including no new checks of credit or income and no new physical appraisal.
Not all mortgage companies have agreed to these terms, so, again, don't hesitate to shop around. It may be worth it to drop your interest rate closer to rock bottom.
For more information: call the FHA at 1-877-622-8525.
If you're behind on your payments
Home Affordable modification Program
Deadline: Dec. 31, 2013
If you signed for your mortgage before 2009 but are late on payments or at risk of falling behind, you may still have a shot at lowering your monthly payments.
You'll need to prove a financial hardship — excessive debt, divorce, medical issues, etc. — and that you'll earn enough to make your modified payments.
You'll also need to verify your income and allow the company that receives your monthly payments, called a mortgage servicer, to pull your old tax returns.
This can be a headache: since HAMP is voluntary, not all servicers agree to these modifications. But, as U.S. Department of the Treasury statistics from July show, it could be worth it.
HAMP loan modifications have shaved an average of more than $500 a month off mortgage payments for more than 1 million homeowners, including 100,000 in Florida and more than 12,000 in Tampa Bay.
For more information: call Making Home Affordable at 1-888-995-4673.
national mortgage settlement
After the nation's largest banks were slammed by claims they recklessly foreclosed homes, they agreed to a $25 billion settlement that would pay to lower interest rates, approve short sales and slash mortgage debts for underwater homeowners.
Only homeowners who are a few months behind on their mortgage can qualify. They also have to prove a financial hardship or be in danger of default, slamming the door for homeowners who have continued to make payments.
At least $10 billion of the settlement is slated to go toward cutting principals. So far, only $750 million has gone toward principal reduction, including $115 million for Florida.
Homeowners have been getting the offers unsolicited, but the settlement has a few years to complete. If you don't want to wait, and you make your mortgage payments to one of the five big banks, you might want to call to ask about your chances.
Floridians who do get an offer are in for a treat. The average refinance slashed $3,800 a year off the interest owed on remaining debt, and the average principal reduction forgave $114,000 per homeowner mortgage.
For more information, call the bank that receives your mortgage payment: Ally Financial/GMAC at 1-800-766-4622; Bank of America at 1-877-488-7814; Citigroup at 1-866-272-4749; J.P. Morgan Chase at 1-866-372-6901; or Wells Fargo at 1-800-288-3212.
If you need help selling your underwater home
New short-sale ruleS: Fannie Mae / Freddie Mac
Begins Nov. 1, 2012
If you are one of the many homeowners with a loan guaranteed by Fannie or Freddie, you may have been blocked from selling your home for less than what you owe if you have made all your mortgage payments.
But new rules from the government-sponsored mortgage giants will allow all borrowers, and not just those who are late on payments, to start a short sale if they can prove a hardship, including divorce, death, disability, disaster or a lost or relocated job.
That's a big change: Fannie and Freddie guarantee more than 4.5 million underwater loans across the country, and 80 percent of them are current.
Short sales allow homeowners to move out debt-free with a lesser — but still significant — credit hit than foreclosure.
Though short sales are the new norm for the distressed market, many sellers have complained banks scorch the deals by taking too long to approve. The new Fannie and Freddie changes also set strict time windows for servicers in an attempt to push for speed.
For more information, call Fannie Mae's Tampa help center at 1-866-442-8554.
Home Affordable foreclosure alternatives
Deadline: Dec. 31, 2013
If you're underwater, behind on mortgage payments and looking to sell your home, a HAFA short sale could erase your debt and net you another $3,000 to move out.
You'll need to prove a financial hardship, and you must have signed for your mortgage before 2009. But unlike other servicer-specific programs, HAFA is available for loans owned by Fannie, Freddie and more than 100 other mortgage companies.
Short sales allows homeowners to avoid foreclosure and cancel their mortgage debt, but HAFA's $3,000 incentive makes it that much sweeter.
Some homeowners who opened their doors to renters while waiting to sell, Hillsborough Title short sale processer Beth Cromwell said, have even given some of that money to tenants to convince them to move out.
For more information, call Making Home Affordable at 1-888-995-4673 or your bank to see if they qualify.
renting instead of foreclosure
Instead of foreclosing, some banks are opting to become landlords, letting homeowners stay in their homes and pay rent as long as they hand over their deeds.
Bank of America launched a "Mortgage to Lease" pilot program in March for 1,000 borrowers across the country but not in Florida.
Last month, CitiMortgage followed suit, offering a Home Rental Program for 500 homeowners in six states, including Florida.
It's a simple idea housing advocates have pushed for years. Distressed homeowners would avoid eviction, sidestep some credit damage, shed their debt and pay rent cheaper than their monthly mortgage payments.
But not everyone has backed the way banks have implemented their deed-in-lieu-of-foreclosure programs. Homeowners lose control of their house, any equity and, possibly, the best chance to stay in their home for good. With deeds in hand, banks can also sell the home to investors who may stop renting and push to evict.
To qualify for Citi's program, homeowners must owe more than their home is worth and be four months late on their mortgage but earn enough to pay rent. Their loan must also be managed by a particular mortgage servicer Citi sold the mortgages to, which is out of homeowners' control.
Fannie Mae and Freddie Mac have offered similar programs for three years: Freddie gives month-to-month rentals for homeowners already foreclosed, while Fannie gives yearlong leases in advance of foreclosure. Neither is widely embraced, and these bank-run pilot programs could go similarly underused.
For more information on Citi's program, call 1-866-272-4749. You can also reach Fannie Mae at 1-800-732-6643 or a Freddie Mac borrower help center in Miami at 1-888-669-0379.
Contact Drew Harwell at (727) 893-8252 or [email protected]