HAMP

The Home Affordable Modification Program (HAMP) hopes to help as many as 3 to 4 million financially struggling homeowners avoid foreclosure by modifying loans to a level that is affordable for borrowers now and sustainable over the long term. The program provides clear and consistent loan modification guidelines that the entire mortgage industry can use. Eligibility is based on meeting specific criteria including:

- Borrower is delinquent on their mortgage or faces imminent risk of default
- Property is occupied as borrower's primary residence
- Mortgage was originated on or before Jan. 1, 2009 and unpaid principal balance must be no greater than $729,750 for one-unit properties.

After determining a borrower's eligibility, a servicer will take a series of steps to adjust the monthly mortgage payment to 31% of a borrower's total pretax monthly income:

- First, reduce the interest rate to as low as 2%,
- Next, if necessary, extend the loan term to 40 years,
- Finally, if necessary, forbear (defer) a portion of the principal until the loan is paid off and waive interest on the deferred amount.

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HAMP has met many criticisms and has not had the impact that economists had hoped with estimates of successful modifications lingering around 3%. However it can be a viable option for some so to us it is worth highlighting.  If, however, a modification is not a good fit for your circumstance please contact us so that we can guide you in the direction that will be best for your specific needs. 

Please, just take the first step and contact us so that we can help!