What is Making Home Affordable, HAMP and their loan mortgage modification programs?
HAMP Loan Mortgage Modification
Loan mortgage modifications all started with president Obama’s Making Home Affordable programs rolled out in February 2009. If you aren’t familiar with the term, HAMP stands for Home Affordable Modification Program which is directed specifically for people strugling to make their mortgage payment. It is designed to help people stay in their homes with a variety of loan mortgage modification offerrings. This can include reducing the interest rate, to reducing the monthly payment, and even to assist with a second mortgage that you may have on the property.
There are many reasons why people can get behind on their mortgage or they are just barely making those payments. As long as the reason isn’t due to unemployment, then it is possible to qualify for a HAMP mortgage modification loan. This can help to reduce the amount of the loan to approximately 31% of the gross income for that household. Depending on your current mortgage amount, that can be a significant reduction in your monthly payment.
Eligibility Criteria for HAMP Loan Mortgage Modifications
There are some basic eligibility requirements that are in place for HAMP. They include living in that property as your primary residence. The mortgage on the home must have been received before January of 2009. The payment must be more than 31% of your gross income. The amount of the mortgage that you owe can’t exceed $729,750.
Applicants must show a financial hardship that has occurred that results in them getting behind on their loan. If they aren’t behind, they must show information that indicates that they are at a high risk of getting behind. Individuals can’t have any conviction in the past 10 years that links them to any crimes associated with property or real estate.
Contact your Lender
There are many lenders on board with the HAMP program and many of them even offer other programs that are on an individual basis. Get in contact with your lender to talk to them about your circumstances. That way you will be able to see what they can do for you. The lender can’t be in your corner if they aren’t aware of what your needs happen to be.
What are the Trends with HAMP and Bank Mortgage Modification that are taking place?
As you explore both HAMP and bank mortgage modification offers, you will find that there are several trends in place. First, the goal is to be able to help someone keep their home if that is what they wish to do. Too often, lenders are seen as the bad guys in all of this. They aren’t out there just waiting for someone to miss a payment so that they can foreclose.
Work with lenders
The cost of foreclosure is very expensive to the lender, so they only pursue it when other means have been exhausted. They do try to work with the homeowner but many people fail to take this opportunity. They don’t see the lender as an advocate for them to keep their home. Lenders are telling more consumers about various programs so that they can help them as soon as they are at risk of getting behind on payments.
Lender principal reductions
In many locations, there are homeowners that find they have no equity at all in their home. They aren’t able to get a traditional refinancing or a second mortgage for this reason. There are trends in modifications that allow for more flexibility. The lenders can even agree to lower the amount that the buyer owes them. This would help them to acquire some equity in their home based on the new amount due for them to completely own that property. This is known as a principal reduction loan mortgage modification.
Short sale your home
One of the options that is offered by HAMP is the ability to take part in a short sale. This is an opportunity to bypass the foreclosure process and to get the home out of your name. It means that you won’t owe any money to the lender either should the sell it for less than what you owe on it. There are some people out there that find this is their best solution. Their circumstances have changed so much due to the economy that it isn’t going to be practical for them to keep the home.
Second mortgage modification
Another trend is that if there is a second mortgage on the property, the lender is looking automatically to see if the homeowner would qualify for programs to reduce that as well. This will further bring down the overall monthly commitment to the amount of funds being paid towards that mortgage. This is very important because falling behind on the second mortgage is just as much of a risk as being behind on the first one.
Counselors are available – so use them!
There are no cost counselors available though that can help with HAMP programs and the possibility of a mortgage modification option. They can explore what someone should pursue based on their circumstances. These counselors know the programs so they are able to help with getting homeowners matched up with the right program. They can also help with the application process and that can be what it takes to make your home loan more affordable in these difficult economic times.
As you can see, there are certainly plenty of opportunities on the table for homeowners. Some of the programs for loan modification are for those that are current on their mortgage. Others though are designed for those that are behind and at risk of foreclosure. Navigating through all of these programs can be a difficult task for the average individual so talk to one of the most notable home owner councelors – HOPE
Your home loan is likely to be your largest bill each month. It can also be the bill you worry about the most. If your income has been reduced, do you pay all your other bills or pay your mortgage? If you pay everything else, are you one step closer to foreclosure? With a loan mortgage modification you may be able to get it all in balance once again. Read more at Making Home Affordable Program eligibility guidelines.