What is the Homeowner Affordability and Stability Plan?

Congress recently passed the Homeowner Affordability and Stability Plan (“the Plan”), which provides various options for homeowners who are feeling the pressure of their monthly mortgage payments in the midst of job losses and rapidly falling home values. One of these options is a federally regulated loan modification program that gives certain incentives to mortgage loan servicers and homeowners for participation in the program; a loan modification changes the terms of the mortgage loan based on the Plan’s regulations so that a homeowner can better afford the payments and avoid the risk of foreclosure.

The Plan also contains a Home Affordable Refinance program, which allows certain homeowners to refinance their mortgage loans. Typically, loan servicers will not permit refinancing where a homeowner has less than 80% equity in his or her home, which has become more and more common as home values have declined in the current recession. Under the Refinance program, however, even homeowners who have less equity may be able to refinance into fixed rate mortgage loans that take advantage of the historically low interest rates.

Participation by mortgage loan servicers in each of these programs is voluntary, so if you are interested in either program, you’ll need to make sure that your loan servicer has signed a contract with the government in order to participate in the program. You can do this by checking the list of participating loan servicers online at www.financialstability.gov, or by contacting your loan servicer directly.

Other Foreclosure FAQs

Q: How do creditors get paid when foreclosing on a house to satisfy unpaid debts?
A: A foreclosure is where the creditor collects its lien by forcing a sale of the debtor's real property. The creditor receives the amount of the proceeds from the sale … More
Q: When and why does foreclosure begin?
A: Lenders will initiate foreclosure proceedings when homeowners become delinquent in their mortgage obligations, usually after three payments are missed. The lender … More
Q: What is a loan modification, and how will it help me with my mortgage?
A: A loan modification occurs when a homeowner enters into an agreement with his or her mortgage loan servicer to change the terms of the mortgage. The goal … More
Q: How long does it take to get a loan modification?
A: The length of time that it takes to get a loan modification depends greatly on how long it takes your mortgage holder to process your loan modification, as … More
Q: I have already filed for bankruptcy. Will the Homeowner Affordability and Stability Plan help me keep my home?
A: While the Plan does not contain specific provisions about consumers who are already in bankruptcy, the Helping Families Save Their Homes Act of 2009, which is … More
Q: What do I need to give to my loan servicer if I am requesting a loan modification?
A: You are likely to need the following documents for your loan modification request: · Recent paystubs or … More
Q: How do I know if my loan servicer is participating in the Homeowner Affordability and Stability Plan?
A: You should check with your loan servicer to see if it is participating in the Plan. If your loan servicer is not participating in the Plan, you should still … More
Q: What are the basic eligibility requirements for a loan modification under the Homeowner Affordability and Stability Plan?
A: You must meet some minimum eligibility requirements in order to qualify for a loan modification under the plan: · … More
Q: Are all mortgage loans eligible for refinancing or loan modification under the Homeowner Affordability and Stability Plan?
A: Yes, most types of loans, including adjustable-rate mortgages, prime or sub-prime mortgages, and loans through Freddie Mac, Fannie Mae, or private lenders are … More
Q: Will I be ineligible for a loan modification under the Homeowner Affordability and Stability Plan if I am current in my mortgage payments?
A: No. You may still be eligible for a loan modification under the Homeowner Affordability and Stability Plan if you are current in your mortgage payments, but you are … More