Borrowers who are facing foreclosure and who have loans guaranteed by the Federal Housing Administration, or FHA, have several options available to them. Borrowers may be able to take advantage of the FHA Home Affordable Modification Program, the FHA Second Lien program or the Special Forbearance for Unemployed Homeowners program if they are having difficulty with making their mortgage payments.
FHA Home Affordable Modification Program, or FHA-HAMP
A part of the Making Home Affordable program, FHA-HAMP helps FHA-insured homeowners who meet the requirements under HAMP to avoid foreclosure. This program permanently reduces the mortgage payments by using a loan modification combined with a partial claim. Partial claims are interest-free Housing and Urban Development loans that do not have to be paid until the borrower either pays off his or her first mortgage or no longer has the property.
The program works by using partial claims to do the following: