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Available programs when facing financial difficulties

mortgage fundamentals
Available programs when facing financial difficulties

Not ok? That's ok. Keep reading for an in-depth guide for understanding your options if you are facing hardship and have trouble paying your mortgage.

Table of contents





Overview

This guide provides an overview so you can understand your options. We are here to work with you to educate you about the programs relevant to your loan and your financial position, and to find the best option for your circumstances.

We will be as transparent as possible with you about your options if you are facing financial difficulty and have trouble paying your mortgage. This includes doing our best to educate you on the benefits and drawbacks of each payment alternative and its impact on your financial health.

  • If you are current on your mortgage, your options may include:
    • Refinance
    • Cash-out refinance
    • Forbearance
  • If you are past due on your mortgage and want to retain your property, your options may include:
    • Forbearance
    • Payment deferral programs
    • Repayment plan
    • Loan modifications
  • If you are past due on your mortgage and no longer want to retain your property, your options may include:
    • Short sale
    • Deed in lieu of foreclosure

It is important to know that Homepoint doesn’t own your loan, we are the servicer on your loan. This means we are responsible for collecting your payments, managing escrow accounts for property taxes and insurance, communicating loan information, and doing what we can to ensure you can stay in your home. We want to work with you to the find the best solution for your circumstance.

Please know that we are limited to offering the payment options set by the owners of your loan, which are the major mortgage investors like Fannie Mae® and Freddie Mac® or guarantors like Ginnie Mae®. If your loan was insured or guaranteed by the FHA, VA, or USDA, they also have guidelines for payment options.





Refinance

Refinancing replaces your existing mortgage with a new loan to take advantage of improved loan terms.

How does it work?

When you refinance, you replace your existing loan with a new loan with new terms. The new terms may have a lower interest rate or other attributes that will make it preferable to your old loan. If you're interested in refinancing, you can reach out to your loan officer or call (833) 773-6489. You can also start the process online at apply.homepoint.com.

What are my options?

When you apply for your loan, you will work with your loan officer to review your options and choose the loan with the right set of terms for you.

What you need to know:

  • A new loan application is required
  • There are income requirements in order to refinance
  • You must be current on your existing mortgage account

Who is this best for?

A refinance is your best option if you have a steady source of income and can continue to make your payments but want to lower your monthly payments.

What are the benefits?

  • May lower your interest rate
  • Changes the term of your loan
  • May change the loan type
  • Normally a combination of the above will lower your monthly payment

What are the drawbacks?

  • Increases the time it takes to pay off your home
  • Typically requires closing costs
  • Could take up to three months to complete
  • May lower your credit score




Cash-out refinance

A cash-out refinance replaces your existing loan and provides you a check at closing. The value of that check, as well as any closing costs associated with your new home loan, are added to the sum of your new home loan.

How does it work?

A cash-out refinance replaces your existing loan with a new loan at a higher amount than owed with new terms, with the difference being paid to you in cash. The new terms will typically have a lower interest rate or have other attributes that will make it preferable to your old loan. Once approved, your new loan pays off the old one, you receive a check for the cash-out amount, and then you proceed with your new payment plan. If you're interested in refinancing, you can reach out to your loan officer or call (833) 773-6489. You can also start the process online at apply.homepoint.com.

What are my options?

When you apply for your loan, you will work with your loan officer to review your options and choose the loan with the right set of terms for you.

What you need to know:

  • A new loan application is required
  • There are income requirements in order to receive a cash-out refinance
  • You must be current on your existing mortgage account
  • You must have equity in your property

Who is this best for?

A cash-out refinance is your best option if you have a steady source of income, have current equity in your home, and want cash to pay extra expenses or medical bills.

What are the benefits?

  • Provides cash at closing that can help with unexpected expenses
  • May lower your interest rate
  • Changes the term of your loan
  • May change the type of loan

What are the drawbacks?

  • May increase your monthly payment
  • Increases the time it takes to pay off your home
  • Typically requires closing costs
  • Could take up to three months to complete
  • Increases total debt which may lower your credit score




Forbearance

Forbearance provides the ability for you to reduce your monthly payments or pay nothing at all for a specific time period. While the total amount of missed payments becomes due at the end of the plan, we will work with you to determine what repayment options may be available.

Under a forbearance plan, you will not receive late fees, you will be reported as current, and negative credit reporting will be suppressed during the plan’s term. Please note that during the term of your plan, you will continue to receive billing statements and other legally required notices.

How does it work?

A forbearance is an agreement that allows you to either make a reduced mortgage payment or no mortgage payment at all for a specific time period. At the end of the time period, you will resume your mortgage payments, and the total amount of missed payments becomes due. If you are unable to pay the past due amount in full at that time, most mortgage investors, insurers and guarantors have options that can spread the past due amounts over a period of time or even move them to the end of your loan. These options generally include a repayment plan, a partial claim or deferral program, or a loan modification.

What are my options?

Homepoint offers forbearance plans of up to 6 months.

What you need to know:

  • Your credit may be negatively impacted, depending on the plan you are approved for
  • No late fees
  • The terms of your mortgage do not change
  • You can shorten or cancel a forbearance plan at any time
  • When the forbearance plan is over, you will need to work with Homepoint to obtain a repayment plan or other approved relief option
  • If you do not make up the missed payments or enter in a relief option, you could lose your home to foreclosure

Who is this best for?

Forbearance is right for people who are experiencing a short-term financial hardship and reasonably expect to have the ability to catch up on payments by the end of the forbearance plan.

What are the benefits?

  • Offers instant, temporary payment relief
  • No late fees

What are the drawbacks?

  • Forbearance is not forgiveness, therefore you must either work with Homepoint to identify other relief options or make up all missed payments at the end of the forbearance period




Repayment plan

A repayment plan is an agreement that enables you to temporarily pay a higher monthly mortgage payment to catch up on past due payments over a short period.

How does it work?

You must contact a Homepoint payment specialist to request a short-term repayment plan. Homepoint will conduct an affordability determination to determine your ability to repay the missed payments. Once that review is complete, you will be sent a repayment plan agreement outlining the terms, which allows you to “catch up” by paying extra each month if you have fallen behind. You do not need to submit additional financial information.

What are my options?

Homepoint offers up to six months for a short-term repayment plan.

What you need to know:

  • You must be behind on your mortgage payments
  • We will conduct an affordability determination
  • Amount of payment cannot exceed 150% of your current mortgage payment
  • Must become current within six months

Who is this best for?

A repayment plan is best if you are not behind more than three payments and can temporarily make higher payments to catch up.

What are the benefits?

  • Spreads the amount owed across an extended time period
  • Helps to establish a path to become current

What are the drawbacks?

  • Higher monthly payments
  • Only available if you can become current in six months or less
  • Total payment cannot exceed 150% of your current monthly payments




Payment deferral programs (Fannie Mae & Freddie Mac loans)

The payment deferral program is for borrowers who have resolved a temporary hardship and resumed their monthly contractual payments but cannot afford either a full reinstatement or repayment plan to bring the loan current.

Simply put, a payment deferral will take your past due payments and either place them as an amount due at the end of your loan or extend your loan term by the number of payments you missed during forbearance. If approved for this plan, the deferred amount would include the past due principal and interest payment amounts and escrow advances.

What you need to know:

  • Investors, insurers and guarantors decide whether to offer these programs
  • Fannie Mae and Freddie Mac are offering payment deferral programs to customers who have faced financial hardship
  • The solution allows you to move the amount of the delinquency into a non interest-bearing balance payable at loan maturity or payoff

What are my options?

The availability of this option depends on your loan type. If you don’t know your loan type, you can contact us via phone or log into your account at my.hpfc.com, and we will provide that information and more on what options might be available.





Loan modification

A loan modification is best if you are past due on your mortgage payments and do not qualify for any other payment relief options. This option offers the ability to modify the terms of your original agreement to potentially make it more affordable and to avoid foreclosure.

How does it work?

You must submit a complete mortgage assistance application to apply. If you are approved, Homepoint will modify the terms of the loan to bring the account back to current status.

What are my options?

Your loan modification plan is determined by the investor of your loan.

What you need to know:

  • You may need to submit a complete mortgage assistance application
  • Your loan term may be extended

Who is this best for?

A loan modification is best if you had a hardship that impacted your ability to make your current monthly payment, but you can afford a modified monthly payment.

What are the benefits?

  • May reduce monthly payment

What are the drawbacks?

  • May extend the time it takes to pay off your mortgage
  • The unpaid principal balance of your loan will increase due to the capitalization of the unpaid past due amounts
  • Terms are dictated by the investor




Short sale

A short sale is one option to avoid foreclosure. We can help you determine if this option makes sense for you.

What is a short sale?

A short sale allows you to sell your property for less than the balance owed (the proceeds from the sale fall short of the amount necessary to pay off your mortgage). In a short sale, Homepoint agrees to accept less than the amount owed on the debt. If you qualify for a short sale, your dedicated Homepoint representative will work closely with a real estate agent to determine a fair sale price based on current market conditions. We’ll also set a timeline for the sale of your home.





Deed in lieu of foreclosure

Another option to avoid foreclosure is a deed in lieu of foreclosure. This may be an option if the sale of your property is more complicated than anticipated, meaning that it may take longer than the time allotted to complete a short sale.

What is a deed in lieu of foreclosure?

To prevent foreclosure, the borrower transfers ownership of the property directly to Homepoint. A deed in lieu also reduces the likelihood of court proceedings and the uncertain timing of a foreclosure sale.

Foreclosure is a legal process that begins when the customer falls behind on a specific number of payments due under their account agreement. If you don’t understand the foreclosure process, you may seek legal guidance or the assistance of homeowner counselors by calling the Homeowner's HOPE Hotline at 888-995-4673.





Getting started

If you are facing financial hardship and would like to talk through your options, please give us a call at (800) 686-2404. One of our payment specialists will work with you to advise you on your options.

If you're interested in refinancing, you can reach out to your loan officer or call (833) 773-6489. You can also start the process at apply.homepoint.com.

To apply for any other programs, you will need to fill out and return the Mortgage Assistance Application.

Note: The program guidelines and features shown here are not comprehensive and reflect only the broadest terms and conditions. When you apply for assistance, Homepoint can help you determine the full range of programs that may be available to you. If you have a financial hardship related to COVID-19, please see the COVID-19 Payment Options Guide for more detailed information regarding specific programs that may be available.

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2211 Old Earhart Road, Suite 250
Ann Arbor, MI 48105
Toll Free: (800) 686-2404
wecare@homepointfinancial.com
NMLS# 7706
nmlsconsumeraccess.org

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