In March 2009, the U.S. government created the Making Home Affordable Program (MHA). Part of the MHA is a loan modification program called the Home Affordable Modification Program (HAMP). HAMP is designed to enable borrowers that meet eligibility requirements to avoid foreclosure by modifying loans to an affordable level, and sustainable for the long-term. WARNING: The Making Homes Affordable Program has been extended to December 2013. Do not wait. Call us today.
The program provides clear and consistent loan modification guidelines that the entire mortgage industry can use.
Borrower eligibility is based on meeting specific criteria including:
- Borrower is delinquent on their mortgage or faces imminent risk of default
- Property is occupied as borrower’s primary residence
- Mortgage was originated on or before Jan. 1, 2009 and unpaid principal balance must be no greater than $729,750 for one-unit properties.
After determining a borrower’s eligibility, a servicer will take a series of steps to adjust the monthly mortgage payment to 31% of a borrower’s total pretax monthly income:
- First, reduce the interest rate to as low as 2%,
- Next, if necessary, extend the loan term to 40 years,
- Finally, if necessary, forbear (defer) a portion of the principal until the loan is paid off and waive interest on the deferred amount.
Loan Modifications Should Be Straight-Forward … But They Are Not
Despite the seemingly straight-forward guidelines under the HAMP program, homeowners are being turned down right and left just become they are unable to complete the process to the satisfaction of the lender. The biggest complaint we hear is the lender is losing the documents and keeps claiming they were not provided.
As homeowners fall further behind, with only vague assurances about their eligibility for a modification, the possibility of foreclosure is rushing closer. Then one day they receive a call from an “investor” who saw name and home listed for a foreclosure sale in the newspaper who wants to give them a “good deal” (steal their equity).
If you are three months or more behind you are in foreclosure territory and should be contacting us. If you have a foreclosure sale date and are getting assurances from a faceless sales rep that the modification should come through soon, you should contact us. If your modification has been turned down you should contact us.
Don’t take a chance on losing your home. Contact a Foreclosure Expert at The Merna Law Group to discuss your options.
The Merna Law Group can assist you in applying for a loan modification through the HAMP program. Call today to schedule a consultation – 800-662-88813 or schedule a free consultation online.
Archive: Loan Modification
by John G. Merna