Owning a home can be a great investment, but it also comes with financial responsibilities, such as paying your mortgage on time. Unfortunately, life can throw unexpected challenges at us, such as job loss, illness, or other financial hardships that can make it difficult to keep up with mortgage payments. Fortunately, there are mortgage relief programs available to homeowners in New York who are struggling to make their mortgage payments. In this blog, we will discuss some of these options, provide helpful government links, and also discuss the consequences of foreclosure.
Mortgage Relief Programs in New York:
New York State Mortgage Assistance Program (MAP):
The New York State Mortgage Assistance Program (MAP) offers up to $40,000 in interest-free loans to eligible homeowners who are struggling to make their mortgage payments due to financial hardship. The loans can be used to bring the mortgage current, pay off arrears, or make payments on a new mortgage. To be eligible for the program, the homeowner must meet certain income and property value requirements. You can apply for MAP through a participating lender or housing counseling agency. For more information, visit the New York State Homes and Community Renewal website.
Homeowner Assistance Program (HAP)
The Homeowner Assistance Program (HAP) is a statewide program that offers assistance to homeowners who are struggling to pay their mortgages due to financial hardship such as job loss, illness, or other circumstances. The program provides up to 24 months of mortgage payments, including property taxes and insurance, to eligible homeowners. To be eligible for HAP, the homeowner must meet certain income and property value requirements. For more information, visit the New York State Department of Financial Services website.
Mortgage Forgiveness Debt Relief Act
The Mortgage Forgiveness Debt Relief Act allows eligible homeowners to exclude canceled mortgage debt from their taxable income. This can be a significant financial relief for homeowners who have been through a foreclosure or short sale. To be eligible for the program, the homeowner must have had debt forgiven between 2007 and 2020, and the debt must have been used to buy, build, or improve their primary residence. For more information, visit the IRS website.
Consequences of Foreclosure
Foreclosure is the legal process by which a lender takes possession of a property from a borrower who has defaulted on their mortgage payments. Foreclosure can have serious consequences for homeowners, including damage to their credit score, loss of their homes, and potential deficiency judgments. A deficiency judgment is a court order that requires the borrower to pay the difference between the amount owed on the mortgage and the amount the lender recovers through the sale of the property. It is important to try to avoid foreclosure whenever possible.
Tips for Avoiding Foreclosure
- Communicate with your lender: If you are having trouble making your mortgage payments, talk to your lender as soon as possible. They may be able to work with you to find a solution, such as a loan modification or repayment plan.
- Seek assistance from a housing counselor: A housing counselor can provide free or low-cost assistance to homeowners who are struggling to make their mortgage payments. They can help you understand your options, negotiate with your lender, and create a plan to avoid foreclosure.
- Consider refinancing or a loan modification: Refinancing your mortgage or obtaining a loan modification may be a good option if you are struggling to make your current mortgage payments. These options can lower your monthly payments and make them more affordable.
Helpful Government Links
- New York State Homes and Community Renewal website
- New York State Department of Financial Services website
- IRS website
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