What Is HAMP?

HAMP or the Home Affordable Modification Program is part of the federal government’s Making Home Affordable Program. HAMP is basically a loan modification program.

Home Affordable Modification Program

The HAMP program is meant to lower the monthly mortgage payments of homeowners who are delinquent and at risk. Under this program mortgage loan servicers must provide assistance to eligible homeowners if they are 31 or more days delinquent. A homeowner who is less than 31 days delinquent can also seek assistance under the HAMP.

Homeowner Eligibility 

To be eligible, you must be at least 31 days delinquent and must in imminent danger of default. Your property is a single to four unit home. If you have already availed assistance under the HAMP, then you cannot avail the assistance for a second time. The property must be used as your primary residence. The mortgage must have originated on or prior to January 1, 2009. Your unpaid principal balance must be less than $729,750 for single unit properties. The eligibility criteria will vary slightly depending on your mortgage loan servicer.  

Servicer

Your mortgage loan servicer and your lender may be the same financial institution or different entities. Your mortgage loan servicer is the entity to whom you make your monthly mortgage payments and is responsible for managing your loan. If you are eligible for assistance under the HAMP, your mortgage loan servicer will reduce your monthly mortgage payments to 31% of your pretax monthly income. Initially your mortgage loan servicer will reduce your interest rate to as low as 2%. Besides reducing your interest rate, the servicer can extend the term of your loan to 40 years. Your servicer can defer a portion of your principal amount until you pay off the loan. The servicer can also waive off the interest on the deferred portion.

Getting Legal Help

If you are at risk at risk of default, consult with an experienced foreclosure attorney. The attorney can advise you on your eligibility for assistance under the HAMP.