Can HAMP Help Those Who Are Current On Their Mortgage?

The Home Affordable Modification Program (HAMP) was created under the federal legislation entitled Making Home Affordable Program in order to stem the tide of foreclosures and the outcome of the economic crisis in 2008.

However, maybe you are one of those people who did not lose a job or have still been able to be current on your mortgage because you could cut back enough to continue to pay. Can HAMP help in this situation? It depends.

HAMP Requirements

Before determining whether a homeowner current on mortgage payments can participate in the HAMP program, the HAMP requirements must be satisfied. If your situation does not fit into these categories, you can not get relief under the HAMP program. You must:

• Be the owner or occupant of a 1 to 4 unit home

• Have an unpaid principal balance equal to or less than the following:

  • 1 unit ($729,750)
  • 2 units ($934,200)
  • 3 units ($1,129,250)
  • 4 units ($1,403,400)

• Have a first lien mortgage originating on or before January 1, 2009

• Have a monthly mortgage payment (including taxes, insurance & homeowner association dues) higher than 31% of your pre-tax income

The lender or loan servicing company must also be participating in the HAMP program.

Homeowners Who are Struggling to Pay

HAMP legislation was not designed to penalize people who are able to make their mortgage payments or who have had to make massive sacrifices in order to pay the mortgage bill. Homeowners current on their payments can seek loan modification under the HAMP program.

If a homeowner has a reasonable belief that an imminent default is going to occur because of increased payments, impending unemployment or some other financial hardship that will cause the mortgage to go unpaid. The homeowner will need to provide documentation of income and expenses as well as proof of the inevitable default that will take place if the mortgage is not modified.

HAMP is not designed for people who can comfortably afford the mortgage payment or any changes to it but simply seek a lower rate. This program is for people with a genuine need for loan modification.

Getting Legal Counsel

Before seeking assistance under HAMP, it is a good idea to speak to a foreclosure attorney in your area who is familiar with loan modification. The attorney will be able to determine whether HAMP is suitable to your situation and provide assistance in dealing with your lender or loan servicing company.