Making Home Affordable

February 18th the Obama Administration announced the Making Home Affordable (MHA) Program, a plan to stabilize the US housing market and offer assistance to up to 7 to 9 million homeowners by reducing mortgage payments to affordable levels and preventing avoidable foreclosures.

There are now updates to the program, including additional details on Foreclosure Alternatives and Home Price Decline Protection Incentives. Foreclosure Alternatives will help to prevent costly foreclosures by providing incentives for servicer and borrowers to pursue short sales and deeds-in-lieu of foreclosure in cases where a borrower is eligible for MHA modification but unable to complete the modification process. This program will assist homeowners who cannot afford to stay in their homes by helping them to avoid foreclosure and relocate to a home they can afford. Building on insights developed by the FDIC, Home Price Decline Protection Incentives will provide additional payments based on recent home price declines, and therefore will incentive additional modifications in areas where home prices have been falling. By increasing the available program modifications and the use of other options verses foreclosure, this will ideally reduce the negative impact of foreclosure, minimizing damaging costs for banks, borrowers and communities.

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