WHAT IS AFFORDABLE HOUSING

From the HUD website:

"The generally accepted definition of affordability is for a household to pay no more than 30 percent of its annual income on housing. Families who pay more than 30 percent of their income for housing are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care. An estimated 12 million renter and homeowner households now pay more then 50 percent of their annual incomes for housing, and a family with one full-time worker earning the minimum wage cannot afford the local fair-market rent for a two-bedroom apartment anywhere in the United States. The lack of affordable housing is a significant hardship for low-income households preventing them from meeting their other basic needs, such as nutrition and healthcare, or saving for their future and that of their families."

I bring this up due to my work yesterday as a volunteer lawyer for the Nassau County Bar Association Mortgage Foreclosure Clinic.

NASSAU COUNTY BAR ASSOCIATION MORTGAGE FORECLOSURE CLINIC

Yesterday, I was a Volunteer Lawyer at the Nassau County Mortgage Foreclosure Clinic and was faced with the following general categories of clients seeking advice:

1) Clients in default of mortgage foreclosure action.

2) Clients just served with mortgage foreclosure actions.

3) Clients not in default of mortgage but seeking advice on loan modification.

All of them had this in common: none of them first sought the assistance of a certified housing counselor for a loan modification. HUD-approved housing counseling agencies are available to provide you with the information and assistance you need to avoid foreclosure. As part of President Obama's comprehensive Homeowner Affordability and Stability Plan (HASP), you may be eligible for a special Making Home Affordable loan modification or refinance, to reduce your monthly payments and help you keep your home. If you need help understanding the Making Home Affordable programs, find a counseling agency in your area that will provide you with free foreclosure prevention services. If you are eligible for the loan modification or refinance program, the counselor will work with you to compile an intake package for your servicer. Foreclosure prevention counseling services are provided free of charge by nonprofit housing counseling agencies working in partnership with the Federal Government. These agencies are funded, in part, by HUD and NeighborWorks® America. There is no need to pay a private company for these services.

MORTGAGE FORCLOSURE

I have consulted with many people who are unhappy with the Making Home Affordable program. The Making Home Affordable Program is supposed to work this way: in return for billions of dollars in taxpayer bailout money, banks would offer loans that would reduce troubled borrowers' monthly mortgage payments to 31 percent of their income. To qualify, a homeowner must have an income and must live in the house, and that house can't be worth more than $730,000. But there are lots of problems:
1. The program is not mandatory.
2. Bank staff and servicing staff is low.
3. The homeowners who most need the program are the riskiest bets.
4. Banks don't always have the final say. Many of these mortgages are held by private investors, and the bank simply acts as a middleman. If investors think they can make more money by foreclosing than modifying the loan, experts say the bank is powerless to override that decision.
5. Banks who do participate and break the program's rules have not been penalized.
If you are seeking this type of relief, don't attempt it on your own. Contact the Homeowner’s HOPE™ Hotline: (888) 995-HOPE. In earlier blogs, I've also pointed out where Nassau County residents can also get assistance.

MORTGAGE FORCLOSURE

The Obama Administration has introduced Making Home Affordable, a plan to stabilize our housing market and help up to 7 to 9 million Americans reduce their monthly mortgage payments to more affordable levels. The Home Affordable Refinance Program gives up to 4 to 5 million homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac an opportunity to refinance into more affordable monthly payments. The Home Affordable Modification Program commits $75 billion to keep up to 3 to 4 million Americans in their homes by preventing avoidable foreclosures. For more information, and to see if you are eligible (there are strict requirements), click on the link to the title.