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Homeowner Help Programs: Find Out If You're Eligible

Monday, 3 Nov 2008 | 8:45 PM ET

J.P. MORGAN

* Available to owner-occupied mortgages and comes on top of an already modified 250,000 mortgages worth $40 billion in 2008

* The plan is open only to those homeowners “who show a willingness to pay,” meaning only customers who continue to make mortgage payments may benefit.

* Available to customers of JP Morgan and Washington Mutual, which was acquired in September.

* A new process will start to review each loan before moving it into the foreclosure process.

* Some borrowers will see lower interest rates, others will see pay-option adjustable rate mortgages, known as option ARMS, transformed into fixed-rate 30-year loans. In some cases, JP Morgan may even forgive loan principal.

* The program will last "over the next two years" and the changes to loans will be made within the next 90 days (and, thus, why there is a freeze on foreclosure).

BANK OF AMERICA

* Available only for owner-occupied homes

* Aim is to help people with subprime mortgages or option ARMs; the bank would temporarily cut interest rates on some loans to as low as 2.5%.

* The goal is to modify a loan's terms to create a new monthly payment, including principal, interest, taxes and property insurance, equal to 34% of a borrower's monthly income.

* The plan will waive prepayment penalties and late fees on distressed mortgages; furthermore it will freeze the foreclosure process for borrowers until their loans are modified or it is determined that the borrowers don’t qualify.

* The plan also will pay an average of $2,000 to borrowers who have lost their homes -- or who will lose them because they don't qualify for the program.

HOPE for Homeowners

*Started by HUD

*Designed to help those at risk of default and foreclosure refinance into more affordable, sustainable loans.

* Program is effective until September 30, 2011.

* Hopes to help as many as 400,000 homeowners avoid foreclosure

Borrowers must meet these requirements:

1. The existing mortgage was originated on or before January 1, 2008;

2. Existing mortgage payment(s) as of March 1, 2008 exceeds 31 percent of the borrowers gross monthly income;

3. The homeowner did not intentionally default, does not have an ownership interest in other residential real estate and has not been convicted of fraud in the last 10 years under Federal and state law; and

4. The homeowner did not provide materially false information (e.g., lied about income) to obtain the mortgage that is being refinanced into the H4H mortgage.

You can find out more about the program at HUD.gov

HOPE NOW

* An alliance of financial counselors, servicers, investors, and other mortgage market participants brought together by the departments of treasury and housing and urban development; its purpose is one of outreach to at-risk homeowners and help them stay in their homes.

* If you have questions or are afraid to talk to your lender, Hope Now has a hotline staffed by government-approved credit counselors who can guide you through your options. The number is 1.888.995.HOPE.