How Do I Get a Loan Modification?

If you are facing the possibility of foreclosure, your home is worth less than you owe, or you are having trouble making your monthly mortgage payments, you might be able to get back on your feet with a little help. One option is to get assistance with your loan from a government program. You need to know, how do I get a loan modification?

Georgia homeowners who have a qualifying hardship can get mortgage assistance through two programs:

  • Underwater Georgia
  • Mortgage Payment Reduction (Recast)

The state of Georgia, through the Georgia Department of Community Affairs, created Homesafe Georgia to administer these programs. They are only available for a limited time, and when the funds run out, the programs will close, like the two previous programs, HomeSafe Georgia’s Mortgage Payment Assistance and Mortgage Reinstatement Assistance, already did. Georgia has the unfortunate distinction of being one of the 18 “hardest hit” states that qualify for federal funds to provide foreclosure help to homeowners.

What Is Underwater Georgia?

If you owe more than your house is worth and you meet the eligibility requirements, you might get a one-time principal reduction of up to $50,000. You can only use the Underwater Georgia (UG) program once, so if you have already gotten help through UG, you cannot reapply. UG will send the money directly to your lender.

  • You must owe less than $250,000 on the home, including all mortgage liens.
  • It must be your primary residence and the only home you own.
  • You must have bought the house before January 1, 2012.
  • Your loan must be more than 110 percent of the current market value of your home.
  • The assistance of between $5,000 and $50,000 must reduce your loan to between 100 and 125 percent of the current market value of your home.
  • You cannot be going through bankruptcy, be delinquent on your tax filings, or be 90 or more days delinquent on your mortgage payments.
  • Your lender must be in the HomeSafe Georgia program or agree to participate.
  • There are additional requirements, such as income limits.

What Are The Mortgage Payment Reduction (Recast) Requirements?

At some time during the last four years, you must have suffered a permanent loss of income from full disability, involuntary retirement, the death of a spouse, or going from involuntary unemployment, worker’s compensation, or disability to Social Security. Recast has requirements to those of UG on owning only one home, having total mortgage balances of less than $250,000, and that the home must be your primary residence. You must also be current on your tax filings and not be in active bankruptcy. Also:

  • The Recast assistance must not take the current property value below 80 percent of the loan balance.
  • There are limits on your payment ratios before and after assistance.
  • Your total liquid assets must be either no more than $10,000 or ten times the amount of your mortgage payment.
  • Similar to the UG program, you can only get assistance one time from a HomeSafe Georgia program, and there are additional program rules.

It is stressful and frightening to face the possibility of losing your home. Talk with a Georgia bankruptcy attorney to learn more options to protect your assets and your financial future.