Foreclosure and Loan Modification Blog

Life After HAMP Part III: Loan Mods in the Trump Era

HAMP, the federal government's loan modification program, expired December 31, 2016, but we're still talking about it in 2018. Loan modifications remain a possibility for homeowners who need help avoiding foreclosure and keeping their home.

What Was HAMP?

In 2009, during the subprime mortgage crisis, foreclosures were happening at a rate not seen since the Great Depression. The Obama administration created HAMP to help struggling homeowners avoid foreclosure by modifying the terms of their loans to make them affordable.

HAMP provided guidelines for modifying mortgages and incentives for lenders to do so rather than foreclose. The program allowed for the term of the loan to be extended, the interest rate to be lowered, and the principal balance to be reduced or restructured so that the monthly mortgage payment was lowered to an affordable percentage of the borrower's current income. 

Life After HAMP Part II: In-House Loan Modifications Still An Option

HAMP (the Home Affordable Modification Program), the government's loan modification program, expired December 30, 2016. Unless your application was accepted before then, HAMP is not an option for you.

But it's still possible to avoid foreclosure by getting an in-house loan modification.

In-house modifications are also called traditional or proprietary modifications, because they existed before HAMP was created and are given according to each lender's standards.

Don't Miss Out! December 30 Last Chance For HAMP Loan Modification

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.

What is an In-House Loan Modification?

If you're having trouble with your mortgage, you're probably aware of the possibility of getting a loan modification to avoid foreclosure and keep your home. A loan modification is a permanent change to one or more of the terms of your mortgage loan, such as the interest rate, term length, or principal.

The most well-known loan modification program is the federal government's HAMP (Home Affordable Modification Program), which was created in 2009 to help homeowners avoid foreclosure and get a more affordable payment.

But there's another type of loan modification that can be just as good as HAMP. It's called an in-house, or traditional, modification.

An in-house loan modification is not a modification that allows you to stay in your house while your mortgage is being modified. You can do that no matter what type of loan mod you're applying for. (You only have to move out after your house is sold and you've been evicted.)

An in-house loan modification is a proprietary loan mod done by your bank, not through a government program. It's also called traditional because in-house mods have been around since before HAMP was created.

Mortgage Forgiveness Debt Relief Act Expiring January 1, 2017

From the point of view of the IRS, any of your debt that is forgiven is considered the same as income, and taxes must be paid on it as such. Forgiven debt has been called phantom income because it's not really income that's there. Despite that, it's still subject to taxation just like it was money you earned at your job.

But in 2007 the Mortgage Forgiveness Debt Relief Act became law, which exempts homeowners from having to pay taxes on forgiven mortgage debt. On January 1, 2017 the act will expire. When it does, forgiven mortgage debt will be taxable again.

Why the Mortgage Forgiveness Debt Relief Act Was Needed

The country has been experiencing a foreclosure crisis over the last decade. More than seven million homeowners have experienced foreclosure since the housing crisis began. As a result so many people had mortgage debt forgiven that the government stepped in to help them avoid even more financial damage with the Mortgage Forgiveness Debt Relief Act.

There's Never Been a Better Time to Get a Loan Modification

If you're having trouble with your mortgage, you've probably heard about loan modifications. Modifying a mortgage loan involves making a permanent change to one or more of its terms. The interest rate can be lowered, the term can be extended, and principal and fees can be reduced.

FHA Updating Loss Mitigation Options to Make Keeping Home Easier

If your mortgage is insured by the Federal Housing Administration (FHA) and you're struggling to keep your home, there's some good news that the FHA recently announced.

The FHA, which is part of the Department of Housing and Urban Development (HUD), announced “new procedures to strengthen the process mortgage servicers use to help struggling families avoid foreclosure and remain in their homes.”

FHA is accomplishing this by “streamlining its loss mitigation protocols that servicers must use when evaluating and deploying 'home retention options,' foreclosure alternatives that allow delinquent borrowers to retain their home.”

CFPB On Loan Modifications, Loss Mitigation In Post-HAMP USA

The Home Affordable Modification Program (HAMP) is ending December 31, 2016.

It, along with the Home Affordable Refinance Program (HARP) and other programs, began in 2009 as part of the federal government's Making Home Affordable program (MHA), which was designed to help struggling homeowners avoid foreclosure after the housing and economic crisis that began in 2007.

HAMP is the principal component of MHA, and it sets guidelines and gives incentives to mortgage loan servicers to modify mortgages rather than foreclose. Sometimes known as 'the Obama Plan,' it's been a popular option for troubled homeowners.

How HAMP Waterfalls Affect Your Loan Modification

Behind on your mortgage payment? Need a loan modification to save your home? You should familiarize yourself with waterfalls. And not the type from the 1994 Grammy nominated song 'Waterfalls' by the American recording group TLC.

The waterfalls relevant to you as a homeowner in need of help with your mortgage are related to the federal government's Home Affordable Modification Program, or HAMP.

Uncle Sam Wants You To Avoid Foreclosure

Do you remember what the country was going through in the late 2000s? You couldn't turn around without hearing something about collateralized debt obligations, credit default swaps, and subprime mortgages. Our financial system was collapsing. Something had to be done.

The government created the Emergency Economic Stabilization Act of 2008, often called 'the bailout,' and the American Recovery and Reinvestment Act of 2009, known as the 'stimulus' or 'recovery act.' The main purpose of the Acts is to protect home values and savings, preserve homeownership, and promote job and economic growth.

To that end, Making Home Affordable (MHA) was created by the U.S. Treasury Department.MHA contains numerous programs intended to help distressed homeowners avoid foreclosure. The programs in it include:

About this Blog

Amerihope Alliance Legal Services is a leading loan modification and foreclosure defense law firm with attorneys licensed in 5 states. We have helped over 7,000 homeowners fight back and keep their homes.

Click to Read Our Super Loan Mod Success Stories

Our goal is to provide valuable information to help homeowners who are trying to obtain a loan modification or to stop foreclosure. You may schedule a free consultation at any time.

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