In January I lost my job. My husbands hours were cut. We have fallen behind on all of our bills including our mortgage. I have tried to refinance so that we can save our house but our home value came back at less then what we owe so that was not an option. I am not looking for cash back. I just want a lower interest rate.
The gentleman that we were dealing with to refinance told me that our mortgage company would not modify our loan since it is FHA insured. Is this true?
Because a home is FHA insured it would fall under the HOPE for Homeowners program from FHA. So FHA does offer a modification program. I don’t have a clue why the guy said an FHA mortgage was not eligible, unless your lender does not participate.
The criteria for the FHA mortgage modification program are that borrowers must meet the following criteria:
- Their mortgage must have originated on or before January 1, 2008;
- They cannot afford their current loan;
- They must have made a minimum of six full payments on their existing first mortgage and did not intentionally miss mortgage payments;
- They do not own a second home;
- Their mortgage debt-to-income must be at least 31 percent;
- They did not knowingly or willfully provide false information to obtain the existing mortgage, and they have not been convicted of fraud in the last 10 years;
- They must follow FHA’s long-standing and strict policy of fully documented income and employment.
- Homeowners must agree to share both the equity created at the beginning of their new HOPE for Homeowners mortgage and any future appreciation in the value of their home.
- To participate, existing subordinate lenders must agree to release their outstanding mortgage liens.
To find out if your lender participates in the program, review the HOPE for Homeowners Participating Lenders List.
If your lender is listed in the listing of participating mortgage companies, contact your mortgage company and ask for specific details or contact a local housing counselor for help.