Home Affordable Modification Program (HAMP)

Too many homeowners are unfamiliar with the Home Affordable Modification Program (HAMP). Even those who know about HAMP do not understand their rights. In a nutshell, HAMP is a mortgage loan modification program created by the federal government (i.e., the Treasury Department) that allows qualified borrowers to modify payments on their first mortgage. It is often referred to as the "Obama Loan Modification Program."

There are 5 criteria for determining eligibility:
1) Home must be borrower's primary residence
2) The amount owed on 1st mortgage must not exceed $729,750
3) You must demonstrate that the current payments are a hardship (e.g., loss of income, inceased expenses, missed payments)
4) Current mortgage was obtained before January 1, 2009
5) Payment on 1st mortgage (including principle, interest, taxes, insurance) is more than 31% of your current gross income.

Anyone meeting these criteria should contact their mortgage loan servicer and request an Initial Package required to be submitted by the borrower to determine eligibility for HAMP. During the HAMP evaluation process the home cannot be referred to foreclosure or be sold at a foreclosure sale if the foreclosure process has already been initiated. However, the foreclosure process can resume if the borrower is determined to be ineligible for HAMP, misses a trial payment, or fails to respond to the servicer's requests for information.

Borrower's in active bankruptcy cases must be considered for HAMP if the borrower, borrower's counsel or bankruptcy trustee submits a request to the servicer. Borrowers who are in a trial period plan and subsequently file for bankruptcy may not be denied a HAMP modification on the basis of the bankruptcy filing.

For more information on HAMP click here AND here.