Unemployed, Underwater Borrowers Get Help Through HAMP Expansion

On March 26, the Obama Administration announced a series of adjustments to the Home Affordable Modification Program (HAMP) and to the Federal Housing Administration (FHA) programs to assist homeowners who have been affected by the current economic crisis.

Borrowers get assistance in three ways through the HAMP expansion: The unemployed can get a three-to-six-month forbearance on their mortgage payments, after which they will be evaluated for a loan modification. Banks will get financial incentives to reduce the principal balances of delinquent, underwater borrowers. And borrowers who are current on their mortgages, but underwater, can refinance into loans backed by the FHA.

Marietta Rodriguez, deputy director of National Homeownership Programs and Lending at NeighborWorks America, said that the recent changes are a positive move and will hopefully ease some of the pressure that those seeking re-employment are feeling.

In an interview with CNNMoney.com Rodriguez added that the expansion will help convince people to stay in their homes.

"For many borrowers, it's really hard to justify figuring out a payment plan for a property that's so underwater," she said.

Read communication about these changes from HUD Assistant Secretary for Housing/Federal Housing Commissioner David Stevens.

More information about the impact of these changes is available at CNNMoney.com.

New Videos Available for Consumers Seeking Loan Modifications

Homeowners who are struggling to make their monthly mortgage payments are looking for relief and straight answers about the loan modification process. A set of videos were recently released that addresses some of their more pressing concerns.

Q&A Series About Loan Modification: NeighborWorks Loan Modification Scam Alert campaign recently asked homeowners to submit their questions about loan modification. Five frequently asked questions emerged and answers were captured for homeowners on video.

Your To-Do List for Getting a Permanent Loan Modification: This video from the Making Home Affordable program tells homeowners how to get a trial loan modification and what they must do to convert the trial into a permanent loan modification.

Avoiding Loan Modification Scams: This video from Making Home Affordable emphasizes for homeowners who are facing foreclosure that help is available and it is free – one of the most important things they need to know to avoid being victims of loan modification scams. Homeowners are provided with several other tips and resources, including NeighborWorks Loan Modification Scam Alert campaign web site, loanscamalert.org.

Beautifying Your Property Can Start a Chain Reaction in Your Neighborhood

Construction Specialists Dave Murnen and Pat Beaty with NeighborWorks of Grays Harbor County in Aberdeen, Washington, published a great article in their local newspaper about how we can all roll up our sleeves and make a difference in our communities – starting with our own surroundings.

“By getting rid of junk in our yards, washing or painting our houses or even just edging a bad lawn, we can start a wonderful chain reaction in our neighborhoods,” they wrote. “This isn’t wishful thinking on our part. It’s documented over and over again by all 200 plus NeighborWorks organizations across the country that fixing up a single house in a neighborhood stimulates surrounding owners to spruce up as well.”

Every year, NeighborWorks organizations mobilize tens of thousands of volunteers, businesspeople, neighbors, friends and local and national elected officials in a week of neighborhood change and awareness through community service. Many of these NeighborWorks Week activities include projects to clean up and revitalize neighborhoods. This year’s volunteer events will take place June 5-12, but the work can begin right now.

“Just get started!” Murnen and Beaty said. “Know your efforts will make a difference and give you — and your neighbors — a lift.” Read more about what you can do.

A Family’s Journey to Avoid Foreclosure Gains National Attention

For over four years, Frank and Judi Viola struggled with a number of personal setbacks that nearly cost them their home near Scranton, Pennsylvania.

Frank suffered an injury that kept him from work for six months and he was dropped from the payroll. Then the mortgage adjusted upward and the Violas fell behind on their payments. They saw the sheriff put the dreaded foreclosure notice on their front door and their home of 22 years went up for sale.

Their story has a happy ending due to the help they received from Neighborhood Housing Services of Lackawanna County, a NeighborWorks America member organization. Now The Story, a national news program has called on them to share their good news with others.

Listen to their first-hand account of how their children and a community — and ultimately their lender — helped them avoid foreclosure.

More background is available here.

CitiMortgage Pilot Aims to Stop Destruction of Foreclosed Homes

A new pilot program launched by CitiMortgage allows homeowners facing foreclosure to remain in their homes for six months – free of charge. They also receive $1,000 to cover moving expenses. In exchange, the homeowners must agree not to trash the home before they turn over the keys to the bank.

Michael Van Zalingen with NeighborWorks member Neighborhood Housing Services of Chicago, said in an interview with NBC news that this program will help relieve a much greater problem. Vacant, looted and destroyed homes are not only less attractive to buyers, they also drive down property values in the surrounding community and encourage crime.

For the at-risk homeowners, the program allows them leave with greater dignity, and their credit scores won’t be as damaged as with a true foreclosure Zalingen said.

NBC Chicago’s article and video on the CitiMortgage program are available here.

NeighborWorks America’s stable communities initiative helps local nonprofits respond to the community challenges that arise when foreclosed homes remain vacant or abandoned. Find out more about those efforts here.