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Part one is here, and part 2 is here.
HAMP (Home Affordable Modification Program) is kind of complicated, so I’m going to break it up into three posts to try to create manageable, digestible bites.
A few preliminary things you should know about HAMP:
1) It is meant to modify first mortgages only (there is a program relating to second mortgages, but it is very narrow and you can only qualify for it, if you first qualify and succeed with a HAMP modification of your first mortgage)
2) It is SUPPOSED to incentivize borrower, servicer and investor participation (much more on that later in the series)
3) It ends in 2012—I guess someone convinced Obama he would end the mortgage crisis before his re-election?
Who should be checking to see if they can qualify for HAMP?
1) It’s only for owner occupied homes. No investment properties, no big apartment buildings, no vacation homes. It can be a 1-4 family home, and you have to be living it.
2) The loan does NOT have to be owned or serviced by Fannie or Freddie. The program is open to all residential first mortgages (however, some securitized mortgages “opt out” of the program, more about that later in the series, too)
3) The borrower can demonstrate the ability to make payments at the new modified amount.
4) Borrower is either in default, or at risk of imminent default
a) Imminent risk of default can be demonstrated by proving that the borrower has had:
- Decrease in income
- Increase in expenses—this is usually related to health care expenses
- Faces an interest rate increase within the next 4 months
- Does not have sufficient savings or other liquid assets to make future payments. (your 401K is safe and does not have to be cannibalized, but regular savings can disqualify you)
5) Have not previously received a HAMP modification
6) Your monthly payment is more than 31% of your monthly GROSS income.
Not all mortgage loans qualify even if the borrower meets the above criteria. Your mortgage must have been made BEFORE January 1, 2009 and the amount owed on it must be equal to or less than $729,750. I wonder how they came up with that particular number.
Take a self diagnostic. If you meet all these criteria, you MIGHT, and I emphasize MIGHT, be eligible for a HAMP modification. Even if you are eligible, you still may not get one, but it may be worth the effort.
[Earlier posts in this series and related links at Kouril's Foreclosure Fraud Resources]
3 Comments
Thanks Cindy!
I am on my third round of trying to get a HAMP modification since September. I cannot tell you how many times I have called and was told all my paperwork was in only to be told at the end of the process that I had done something wrong. On the second round of sending in the info I found out quite by mistake that the bank had not done the appraisal in time. But they orginally told me it was my fault. I could go on and on but won’t. It will be a miracle if we get the modification. I know we qualify but it seems like they are working against us. I have to admit that the third time they seemed more helpful.
You have to remember that the folks doing this are bill collectors. The culture and mindset of bill collectors is very different than the culture and mindset of community advocates or social workers. SO, of course they are screwing it up. You are asking confirmed carnivores to help people go vegan.
One good tip I learned at the seminar, individually number each page you send to them (called “bates stamping”) and also put your name and loan # on each page. Then do a cover letter that specifies the actual bates stamp numbers of what you are sending in.
Send it in either return receipt requested or by UPS, FedEx, etc so that you get 1) a tracking # (and put the tracking number in the cover letter, too)
2) a signature.
So when they say your package was not received, you can prove them wrong, when they say it is incomplete, you can prove them wrong.
At a certain point if they have screwed up enough, you can sue THEM–in many states. Make sure to get legal advice in your own state.
The appraisal thingy is REALLY important and has been used a lot recently to challenge HAMP denials