Understand Home Affordable Loan Modification Program Guidelines And Apply Online Today

As a homeowner if you are suffering from financial hardships due to excessively unmanageable

home mortgage debt, you can get a chance to modify a home loan. Instead of waiting for financial situation to get worst, it is now a time for you to seek professional counseling and experience debt relief. As per several programs introduced by federal government, you can experience debt relief through mortgage modifications, subject to eligibility standards.

HAMP (Home Affordable Modification Program) is the U.S federal program. It officially came into force in 2009 to help homeowners with mortgage debt relief on their ongoing home mortgage by reducing their monthly mortgage payments and thereby avoiding possible foreclosures. HAMP will cease to exist on 31 December, 2013 and is applicable only to those mortgages originated on or before 1 January, 2009. It is a part of Making Home Affordable Program (MHA). MHA is also brought in force for reducing mortgage crises, including making home affordable.

The purpose of HAMP is to support homeowners who are at risk of foreclosure with lower mortgage payments by negotiating with lenders. The program runs in collaboration with lenders and borrowers. HAMP will provide federal incentives to encourage all parties to engage in loan modification and other programs like mortgage modification programs, etc. under Making Home Affordable Program.

HAMP processing is not too easy and hence requires assistance from expert who is aware of the process. There are firms available on internet, having a network of competent professionals. As a borrower, you may seek help from them.

Loan modification attorneys are expert into mortgage modifications, home affordable refinance program, and so on. They know in detail criteria and terms under federal programs. They will assist you in getting qualified for the program and thereby will make the procedure hassle-free. If you are in need of affordable and convenient home loan modification, HAMP is amongst the best programs designed for struggling homeowners.

HAMP eligibility requirements -

Borrowers current principal interest, property tax and homeowners insurance payments are in total more than 31% of his gross monthly household income.

HAMP is applicable to home mortgages originated on or before 1 January, 2009.

Property occupied by homeowner must be primary residence. Abandoned and vacant properties are not eligible.

First-lien mortgages must be securitized and guaranteed by Freddie Mac are eligible with existing unpaid principal balances up to: 1 Unit - $729,750, 2 Units - $934,200, 3 Units - $1,129,250, 4 Units - $1,403,400

Borrowers are required to submit income documents, including signed IRS 4506-T, paystubs and tax returns documents and affidavit of financial hardship.

Lenders who are in foreclosure with ongoing litigation with respect to mortgage are eligible. Those who are in active bankruptcy are also eligible.

HAMP procedures -

A net present value (NPV) test will be executed on loans that are at risk of imminent default. The test will compare NPV of cash flows with as well as without modification.

Steps will be taken to reduce monthly payment made by borrowers, not more than 31% of gross monthly income.

Initially, interest rates can be reduced. If required, loan term can be extended maximum up to 40 years. There are also alternatives like principal forgiveness.

The program will share deduction in monthly payments with lenders from 38% DTI to 31% DTI.

Homeowners who maintain regularity in their payments are eligible for principal reduction up to $1,000 every year for up to five years.

by: Sally Mansell

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