What are HAMP Modifications?

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What are HAMP Modifications?
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What Does HAMP Stand For?
HAMP is an acronym for The Making Home Affordable
Program.
This program was enacted in February 2009 by the
federal government.
Basically, HAMP is a voluntary program that
encourages mortgage lenders to modify mortgages
for at risk homeowners.
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How Are Homeowners Affected?
HAMP allows homeowners to apply to their mortgage
lender to renegotiate the terms of their loan
under the program.
This can be done easily with the help of a
mortgage modification attorney.
To qualify for the HAMP, homeowners must be
considered at risk with serious hardships
involving either loss of income, increase in
expenses, or payment shock due to significant
increases in their mortgage payments.
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How Are Mortgage Holders Affected?
There are also benefits for mortgage holders as
well.
When a modification lawyer presents a case and
the servicers of the loan accept, they would
receive a financial incentive from the federal
government for modifying a loan.
Also, modifying a loan helps ensure that regular
payments dont stop, which would force the
mortgage holders to foreclose.
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Voluntary or Mandatory?
Though the program was initially voluntary, there
are some exceptions.
Modifications on loans not held by government
enterprises are strictly voluntary and a mortgage
lender can reject, deny, or fail to respond to a
borrower.
However, Participation in HAMP is mandatory for
servicers of loans that are owned or guaranteed
by Fannie Mae or Freddie Mac, which are
Government Sponsored Enterprises or GSEs.
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How Are Payments Lowered?
There are two different ways that mortgage
holders can lower payments on a modified loan.
The first way is to lower the interest on the
loan, so payments will be less expensive.
The second way is to reduce the principal of your
loan, but more often mortgage holders will choose
to lower your interest instead.
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What Are Some Restrictions?
The HAMP modifications come with a few
restrictions.
First of all, The amount of the mortgage can not
exceed 729,750 for a single unit home, and the
loan must have been created before January 1,
2009.
Also, if you qualify for modification under HAMP,
you will undergo a three month trial period at a
new trial payment level. If you dont make all of
the payments, you will not qualify for permanent
modification.
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HAMP Amendments
Several amendments were made to the HAMP
modifications in 2012.
The program was expanded to include many other
types of mortgage loans including loans on homes
that are rented out and loans held by homeowners
that were previously declined because their
income was too high.
Also, HAMP has been extended to 2015 to give
homeowners a few more years to take advantage of
the program.
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Avoiding Bankruptcy
The HAMP modifications were put into place to
help homeowners avoid foreclosure and avoid
bankruptcy.
The extensions will be able to help even more
people get back on their feet and still be able
to keep their homes.
To see if your loan is a GSE-owned, contact
www.FannieMae.com/ LoanLookup, or
www.FreddieMac.com/ MyMortgage.
http//www.ny-bankruptcy.com