What is Home Affordable Modification Program (HAMP)?
The “Making Home Affordable” loan modification program was a new policy promulgated by the Obama Administration to cut monthly mortgage payments by up to 40 percent (or $1000 or more) for qualified homeowners in an effort to prevent foreclosure. This program aims to help 3 to 4 million at risk homeowners and is available to qualified homeowners through December 31, 2012. Loans can only be modified once.
Borrowers must provide a letter of hardship explaining that a change in their economic circumstance or a rise in mortgage payments will lead to a default.
The eligibility guidelines* include:
Must be owner occupant and primary residence of borrower.
Loans must have originated before January 1, 2009.
No minimum or maximum loan-to-value ratio.
Mortgage payment exceeds 31 percent of pretax income.
Owe up to $729.750 (which is the jumbo loan limit).
Mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac.
Financial hardship; in danger of falling behind on payments.
Sufficient documented income to support the modified payment.
Borrowers must fully document income, sign an IRS 4506-T, provide two most recent pay stubs, provide most recent tax return, and sign an affidavit of financial hardship.
Borrower must not have been convicted of mortgage fraud or tax evasion connected with a mortgage or real estate transaction.
*Above criteria is for guidance only.
Part of the program includes incentives to extinguish second liens, which will make it easier for borrowers to meet the desired debt-to-income ratio target of 31 percent. If a borrower qualifies for HAMP, they may want to also check into the Second Lien Modification Program (2MP).
Borrowers must provide a letter of hardship explaining that a change in their economic circumstance or a rise in mortgage payments will lead to a default.
The eligibility guidelines* include:
Must be owner occupant and primary residence of borrower.
Loans must have originated before January 1, 2009.
No minimum or maximum loan-to-value ratio.
Mortgage payment exceeds 31 percent of pretax income.
Owe up to $729.750 (which is the jumbo loan limit).
Mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac.
Financial hardship; in danger of falling behind on payments.
Sufficient documented income to support the modified payment.
Borrowers must fully document income, sign an IRS 4506-T, provide two most recent pay stubs, provide most recent tax return, and sign an affidavit of financial hardship.
Borrower must not have been convicted of mortgage fraud or tax evasion connected with a mortgage or real estate transaction.
*Above criteria is for guidance only.
Part of the program includes incentives to extinguish second liens, which will make it easier for borrowers to meet the desired debt-to-income ratio target of 31 percent. If a borrower qualifies for HAMP, they may want to also check into the Second Lien Modification Program (2MP).
