The Home Affordable Modification Program is a program developed by the federal government in response to the mortgage crisis. This program offers opportunities to modify or refinance your mortgage to make your monthly payments more affordable.
Eligibility
To be eligible for the Home Affordable Modification Program, your loan must
- have originated on or before January 1, 2009.
- be a first lien loan
- unpaid principal balance should not exceed $729,750.
This limit is higher for owner occupied properties with 2-4 units:
- 2 Units: $934,200
- 3 Units: $1,129,250
- 4 Units: $1,403,400
The home must be an owner occupied, single family 1-4 unit property (including condominium, cooperative, and manufactured home affixed to a foundation and treated as real property under state law). The home must be a primary residence. This will be verified using your tax return, credit report, and other documentation such as a utility bill.
There is no minimum or maximum LTV ratio for eligibility purposes. Loans can only be modified under the Home Affordable Modification program once.
This program will not apply for investor owned homes or homes that are vacant or condemned.
Even if you are in bankruptcy,
you are not automatically eliminated from consideration for a modification. You
can also qualify even if you are in active litigation regarding the mortgage
loan without waiving your legal rights.
Incentives
You are eligible to receive a Pay-for-Performance Success Payment that goes straight towards reducing the principal balance on the mortgage loan as long as you are current on your monthly payments. You can receive up to $1,000 of Pay-for-Performance Success Payments each year for up to five years.
Avoid foreclosure
This program is intended to help at risk homeowners avoid foreclosure by reducing their monthly mortgage payments. This program works in tandem with the Hope for Homeowners Program. Under the Home Affordable Modification Program, servicers can modify eligible mortgages so that at risk homeowners can better afford their mortgage payments. The interest rate floor for modified loans is 2%. The modified interest rate must remains in place for five years. After five years, it will be gradually increased 1% per year or such lesser amount as may be needed until it reaches the Interest Rate Cap which is the lesser of
- the fully indexed and fully amortizing original contractual rate or
- the Freddie Mac Primary Mortgage Market Survey rate for 30-year fixed rate conforming mortgage loans, rounded to the nearest 0.125%, as of the date that the modification document is prepared.
Getting Legal Help
If you are facing foreclosure, consult with an experienced foreclosure attorney to know more about the HAMP. The attorney can study your case and let you know if you qualify and will advise you on how to apply under this program.
