Oct 26

Home Affordable Modification Program (HAMP)

The Home Affordable Modification Program (HAMP) is one of the safest and most efficient ways to save one’s home. Unfortunately, not everyone qualifies for a home loan modification. You must meet both government and lender guidelines to be able to take part in the program. Home loan modification qualifications may vary from lender to lender, but for HAMP, the following rules apply:

1) The mortgage must have been taken out in 2009; that is, the date of origination must be on or before January 1st of the said year.

2) You must use the home as your primary residence at the time of the loan modification. Rental or commercial properties, second homes, and homes of more than four units do not meet home loan modification qualifications.

3) Your mortgage balance must be no more than $729,750 if it’s a single-family home, $934,200 if it’s a two-unit property, $1,129,250 if it’s three units, and $1,403,400 if it’s a four-unit home.

4) You must be in financial hardship or prove that you’re at risk of it. According to home loan modification qualifications, a hardship is valid if it’s beyond your control. Losing your job, medical expenses, or a death in the family can be a valid hardship, but excessive spending or bad investment choices may not make the cut.

5) The loan must not have been previously modified. You cannot get a second loan modification even if you still meet home loan modification qualifications.

6) You must have a source of income to prove that you can afford the modified rates if they are granted. Most lenders’ home loan modification qualifications require at least two months’ worth of pay stubs or documentation of income.

7) You must prove that you have no other means of keeping the mortgage current besides a loan modification. This is usually in the form of bank statements and income tax returns.

8) If your total debt takes up more than 55% of your monthly income, you will need to attend a credit counseling session at the Department of Housing and Urban Development (HUD).

Once you meet these guidelines, you can send a HAMP application to your lender. They will then assess you using their own home loan modification qualifications. Make sure to provide as much information as possible and be prepared to submit additional documents if necessary. This will help you avoid delays and get your loan modification processed sooner.