Federal Mortgage Relief Program: New Rules Implemented in Effort to Improve Loan Modification Results

August 1st, 2011 | Posted in Debt Relief

In response to the nation’s housing and economic crises, President Obama initiated something called the Hardest Hit Fund. Its purpose was to provide financial to federal mortgage relief program to the families that were most affected and were at risk of losing their homes to foreclosure. About $7.6 billion was allocated to 18 states in which foreclosure and unemployment rates were soaring. Earlier this year, the Department of Housing and Urban Development (HUD) announced the start of a new program intended to supplement the Hardest Hit Fund.

federal mortgage relief program, On the other hand, interest income obtained because of life insurance may be taxed. Make sure to find out which category the proceeds fall under. Child Support Payments
Child support is not taxable to the recipient. Due to this fact, the child support paid by a person is also not deducted from the supporter’s tax return. However, maintenance payments are taxable to the recipient. Scholarships and Fellowships.

Eligible homeowners for modifications under HAMP must: Owe monthly mortgage payments that are greater than 31 percent of their income. Have a mortgage balance less than $729,750. Live in an owner-occupied principal residence of one to four units. Demonstrate a financial hardship. Be current on mortgage payments. Qualify for a standard FHA-backed loan once the principal is reduced. What are banks asked to do?

Worker’s Reimbursement
The money you receive as a result of compensation for injury or illness is not taxable. This is so only if the money is paid based on the worker’s compensation act. Accident survivors are also excluded from tax. Disability Income. If you make payments for the cost of an accident or health insurance program by yourself, any income you obtain for your disability will not be taxable. However, if you cover the costs of the accident or health insurance through another plan, and the total sum of the premium was not added as taxable income, the premiums will be regarded as covered by your employer and hence, the disability benefits will be fully taxed.

Welfare and Other Public Assistance Benefits. Money obtained from government benefits focused on need is also not taxed. This includes food stamps, cash aid, and medical aid among others. Some of the governmental benefits include mortgage assistance, nutrition plan for the elderly, disaster relief, old age, accident survivors and disability benefits.

Learn more about Obama Mortgage Relief Plan Qualifications.