If you're thinking about filing for bankruptcy and believe that doing so means you can't qualify for a Home Affordable Modification Program, or HAMP, loan modification, think again. In 2010, HAMP guidelines were modified to require mortgage servicers to consider delinquent borrowers in active bankruptcy for a HAMP modification if a request is received from the borrower, the borrower's attorney, or the bankruptcy trustee. (For more information, see Making Home Affordable Supplemental Directive 10-02. For general information about HAMP, visit www.makinghomeaffordable.gov.)
In addition to the requirement that mortgage servicers consider borrowers in bankruptcy for a HAMP modification, mortgage servicers are prohibited from denying borrowers in a trial modification period a permanent modification merely because the borrower subsequently filed for a Chapter 7 or Chapter 13 bankruptcy. Even if a borrower chooses not to reaffirm a first-lien mortgage debt in a Chapter 7 bankruptcy, the borrower may still qualify for a HAMP modification.
Homeowners who are struggling to make their mortgage payments or feel that their lenders or servicers are giving them the run-around on their loan modification applications may want to contact a bankruptcy attorney for assistance. Many lawyers are happy to offer prospective clients a free consultation for a loan modification. If you can't afford an attorney, you can get free help from a HUD-approved housing counselor. Find a counselor at www.995hope.org or by calling 888-995-HOPE (4673).