HAMP, the federal government's mortgage loan modification program, is expiring. Your complete application must be submitted by December 30, 2016 in order to be eligible to participate in the program.
The Home Affordable Modification Program (HAMP) is designed to help homeowners who have experienced a financial hardship, such as loss of income or illness, to get their mortgage back to normal servicing with a lower monthly payment that they can afford long-term.
A lower payment can be achieved by changing the interest rate, extending the term of the loan to as many as 40 years, and/or forgiving or forbearing some of the money owed on the loan.
Here are the basic eligibility requirements for participation in HAMP:
- You are struggling to make your mortgage payments due to a financial hardship.
- You are delinquent or in danger of falling behind on your mortgage.
- You got your mortgage on or before January 1, 2009.
- Your property has not been condemned.
- You owe up to $729,750 on your primary residence or one-to-four unit rental property (loan limits are higher for two- to four-unit properties).
If you meet those requirements and would like to apply for a HAMP modification, you need to act immediately. While you have until December 30, 2016 to apply, it takes some time to gather all of the documents and apply. So time is even more limited than it may seem.
How To Apply For HAMP
First contact your mortgage servicer and tell them you want to be evaluated for a HAMP modification. Although HAMP is a government program, you have to apply with your lender by submitting a package of documents called a Request for Mortgage Assistance (RMA).
The exact documents required can vary depending on lender, but you'll have to show your mortgage company documentation of your income, assets, debt, and the hardship that caused you to have difficulty paying your mortgage.
Here's a list of some of the things you will need to complete your RMA:
- Mortgage statement
- Two most recent tax returns
- Pay stubs (and other documentation of income)
- Two months bank statements
- Utility bill
- Hardship letter
After receiving an RMA, lenders often deny the application or ask applicants to submit additional documents or more current versions of documents they've already submitted. Many homeowners find the process very frustrating.
A big part of getting any loan modification is proving that you can actually afford the loan with your income. You can also be denied for having too much income so it looks like you don't deserve assistance.
Benefit Of HAMP
The banks that took bailout money from the government in 2008 (which is most of them) are required to participate in HAMP and to evaluate you for the program if you meet the eligibility requirements. Now and in 2017 and beyond there will still be loan modifications available to distressed homeowners, but they will be in-house modifications given according to a lender's own guidelines.
In-house modifications, also called traditional or proprietary modifications, can be as good or better than those from HAMP, but the lender isn't bound by any government requirements for them. They could choose to not consider you for a modification if they don't feel like it, or they could have a rule that no one gets more than one modification for the life of their loan. It's all up to them what terms to give and to whom. It could be better, or it could be nothing.
So, if there's any chance you could benefit from a HAMP modification, now is your last chance to try. Even if you've previously had a loan modification, you may still be eligible for a HAMP tier II mod.
The Importance of Getting Good Help
Dealing with foreclosure is too serious to handle on your own. Losing your home can negatively impact your life for years after the fact. It not only damages the homeowner's credit, but harms their children's success in school and makes them more likely to develop behavior and health issues.
You should think seriously about hiring a foreclosure defense attorney who can help keep you out of foreclosure while working for a permanent solution, such as a loan modification. Drawing on the knowledge of an experienced professional can increase your odds of getting the best outcome, whether it's a HAMP mod, in-house mod, or loss mitigation option like a deed in lieu of foreclosure.
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