HAMP (Home Affordable Modification Program) was created by the government. This was in the wake of the mortgage meltdown of 2008 when Americans lost jobs, homes, and assets at an incredible rate. HAMP allows changes to mortgage terms in order to help homeowners to bring delinquent mortgages current and avoid foreclosure. It also makes payments affordable and offers principal reduction incentives to help the homeowner stay current going forward. HAMP will end on December 31, 2016 so now is the time to get answers to these 4 important questions.
How do I know if I qualify for HAMP?
Be aware that not all mortgage companies participate in HAMP. And even if they do, there is no guarantee that an application for a HAMP modification will be approved. However, there are some guidelines that will help you to know if you are eligible for consideration for a HAMP modification…
- Your mortgage payment is more than 31% of your gross household income
- Your mortgage was originated on or before January 1, 2009
- You are delinquent by 60 days or more or you are in danger of becoming delinquent because of divorce or if one of the homeowners dies or becomes disabled.
How would HAMP change my loan?
In order to bring the mortgage current and make the mortgage payment affordable for the homeowners who are applying a HAMP modification the terms of the mortgage will have to change. Here are the changes that may be made in order to make the home affordable.
- Reduction on interest rate as low as 2%
- Extension of the loan term of up to 40 years
- Rolling of delinquent payments and fees into the loan to bring the mortgage current
- Incentives for loans that are kept in good standing with on-time payments, up to $1,000 each year during the first five years of the modification and a one-time payment of $5,000 in year six—and over six years the total principal reduction could add up to $10,000.
Can I still apply for HAMP?
Yes, the deadline for HAMP applications is December 30th 2016. You can find out more about how to apply at www.makinghomeaffordable.gov. Reaching out to a HUD certified housing counseling agency can help you with the application process and may increase your chances of receiving a modification. You can call LSS at 1-888-577-2227 to schedule your free session or visit www.ConquerYourDebt.org for more information.
Be aware of mortgage rescue scams and avoid working with anyone who is charging you money and/or guaranteeing a modification. Housing counseling services are free.
What if I don’t qualify for HAMP…what are my options?
If you are delinquent on your mortgage or think you are going to fall behind, act now! Even if you are not eligible for HAMP there are still modifications and other foreclosure prevention options available. The key is to reach out right away because the sooner you take action, the more options you may have. Give us a call at 1-888-577-2227 to speak with a HUD-certified housing counselor today.
Author Ashley Hagelin is a HUD-Certified Counselor with LSS Financial Counseling and she specializes in Foreclosure Prevention and Reverse Mortgage Counseling.