Under the Making Home Affordable Program, can I refinance and use the equity of my home to take out cash to live on?

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Under the Making Home Affordable Program, can I refinance and use the equity of my home to take out cash to live on?

My unemployment is about to run out and I need cash to pay my bills.

Asked on March 23, 2012 under Real Estate Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Unfortuntately, you probably can't do this: the MHA program is designed to lower payments and/or principal indebtedness to allow distressed homeowners to meet their monthly obligations. It is not a vehicle for cashing out equity from a home, and I do not believe that you can cash out equity under a MHA refinance or loan modification. (If you think about, that makes sense: if a homeowner is in financial distress but could cash out equity, many people would do so--then take the cash, walk away from the debt, and let the bank keep the unaffordable home.)


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