More than 70 percent of home owners are unaware of government mortgage modification programs to help underwater borrowers, according to a new survey by FreeScore.com, an online credit servicer.
Underwater home owners--those who owe more on their home than it’s currently worth--are at risk of falling behind on their mortgage payments or falling into foreclosure. The government offers several programs aimed at helping underwater home owners refinance their loans or obtain a loan modification to make their monthly payments more affordable.
Seventy-two percent of the 300 survey respondents said they had never heard of such programs as the Home Affordable Modification Program (HAMP) or the Home Affordable Refinance Program (HARP). In fact, only 13 percent of the respondents said they had heard of both HAMP and HARP.
The two government programs provide struggling borrowers a way to refinance into today’s ultra-low mortgage rates.
“Prior to these plans, underwater home owners, whose mortgages were worth more than their homes, had little recourse but to either pay the higher mortgage rate on the devalued property or ultimately foreclose,” according to FreeScore.com. “The programs help underwater home owners avoid foreclosure by allowing borrowers to renegotiate the terms of their mortgage, refinance at lower rates, and adjust monthly mortgage payments downward, in line with current market valuations.”
Source: FreeScore.com
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