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  • Home Affordable Modification Program (HAMP)

    If you are currently employed but having difficulty maintaining your obligation with your home loan lender, then you might qualify for HAMP, the Home Affordable Modification Program. This program is designed to assist home owners manage their payments to avoid foreclosure. The target payment point is thirty one (31) percent of the borrowers verified pre-tax income.

    If you are unemployed, there is also help available to you. Read more about home loan modification programs for unemployed individuals.

    Contact a home loan modification lawyer to see if your lender participates in the HAMP program, or fill out the form instant access to a professional that can help you and offer advice and ideas about how to process now.

    HAMP Guidelines and Requirements

    Home owners experiencing financial difficulties and have missed payments or are fearful of future issues with meeting mortgage payments can apply for the HAMP program if they currently occupy the residence in question and that they obtained their mortgage prior to January 1, 2009. The home owner must also have a mortgage payment that is greater than 31 percent of their pre-tax earnings, and a principal owing on the home that is less than $729,750. Any applicant with a real estate related felony within the last 10 years will be declined.

    There is, however, some flexibility in the requirements and it is advisable to determine your eligibility for the HAMP program by speaking with a home loan modification lawyer as soon as possible, there is hope and there are many options.

    How to apply for the HAMP Program

    To apply for the program, you can send your application directly to your lender. The HAMP application is actually a package of material that you must assemble prior to starting the HAMP process. The package includes a basic request for mortgage payment assistance, using the HAMP Request Form. You must also include a tax form (either the 4506T-EZ or the 4506-T) and a Verification of Income form.

    The purpose of this document is to outline to your lender the nature of your request and the underlying conditions which have lead the borrower to taking this next course of action. If the current mortgage has more than one signatory, then each one must also sign the document, all borrowers on the note must aknowledge the request for mortgage assitance in this way. It is on this form that verification that all borrowers on the mortgage have not been convicted of a real estate related fraud in the previous ten years.

    The 4506T-EZ document are simply to grant permission to the IRS for the lender to be provided the borrowers latest tax filings. For those borrowers on the mortgage who have not filed taxes must, they must use the 4506T form which simply allows the lender to verify that you did not file a return with the IRS. You must retain a printed copy of either 4506 request for your own files.

    The Proof of Income form allows the lender to verify your income in an effort to establish that the borrower’s income meets the required parameters of the HAMP program and to ensure that they will be able to meet future obligations made by the Home Affordable Modification Program. The form has a checklist to make sure that no source of income is overlooked. This request also requires that the applicant keep a copy of the request for their records.

    Once all the forms have been completed and copies made, your application package can be then submitted to your lender. All lenders who have loans with the Fannie Mae and Freddie Mac are required to participate. For help and advice, it is advised to seek a home loan modification lawyer, especially if you are having trouble with documents or having trouble being accepted into the program.

    The application, behind the scene

    For each application, the lender will check the Net Present Value (NPV) of the property as part off their internal eligibility requirements. This value is a statement of what the loan is valued at in the current housing market. If the Net Present Value of the loan is higher (or within a specific range) than the Net Present Value of the mortgage without the HAMP modification applied to it, then the lender must provide the request loan modification if the applicant is otherwise eligible. If you have received a HAMP Non Approval Notice and the calculation does not result in a favorable result for the homeowner applicant, then the homeowner has another chance to have the Net Present Value reassessed. Contact a home loan modification lawyer to see what options are available.

    The HAMP Trial Period Plan

    Once the process has begun, the applicant begins a Trial Period in which all the required documents are submitted to the lender and the first trial payments are made. The Trial Period has a deadline before which the lender must grant a permanent modification or the applicant will fall out of the program. If this happens, then those applicants will want to take advantage of the HAMP extended program.

    It is very highly recommended that at this point in the HAMP application process, given the benefits of the HAMP program, that all applicants stay vigilant in their efforts and make sure that the lender has the correct documents, that they are legible (if done by hand) and that they are complete. Following up with phone calls and getting answers to questions is vitally important. If you feel that you may not be able to absorb the burden of any time required to facilitate this process, then it is advised to seek a home loan modification lawyer and pass those responsibilites to them. Having said this, it is also vital that you confirm with your lawyer that all deadlines and requirements are met.

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