You've probably been hearing about HAMP loan modification guidelines if you've been following recent developments in the U.S. housing market, or if you’ve been looking into applying for a loan modification. HAMP refers to the Home Affordable Modification Program that was initiated by the Obama administration as a measure to help struggling homeowners in America to save their home from foreclosure. In order to be eligible to participate in this program, you need to be mindful of the various HAMP loan modification guidelines that govern its administration.
Core HAMP loan modification guidelines:
- The applicant must be residing in the property as the primary resident.
- The mortgage must have originated prior to January 1st, 2009.
- The relevant mortgage payment needs to be less than $729 dollars, $750 for a single unit residence.
- The applicable lender must be one that is approved by the United States Treasury Department.
- The current mortgage payment must exceed 31% of the homeowner’s gross monthly income, including taxes, homeowners insurance and dues.
- The home loan in question must not have been modified under the HAMP program previously.
- The loan needs to be delinquent, or the risk of default must be clearly foreseeable. Mortgages that are already in foreclosure may still qualify.
- For an owner-occupied, single-family property, the mortgage loan must be secured by a one- to four-unit property, of of which one is the borrower’s main residence.
- The property securing the home loan must not be empty/vacant or condemned.
- The homeowner needs to clearly document real financial hardship, and be able to demonstrate that there is insufficient liquid assets available to successfully cope with the monthly payments.
- The homeowner needs to agree to the creation of an escrow account (if one is not already in place) for taxes and hazard and flood insurance, before the trial modification period starts.
- Outstanding principle amounts – The existing unpaid principle balance of the home loan before capitalization must not exceed $729,750 for a 1-unit, $934,200 for a 2-unit, $1,129,250 for a 3-unit, and $1,403,400 for a 4-unit property.
- The lender must receive a timely first trial period payment from the homeowner on or prior to December 31st, 2012.
If as a homeowner you meet these criteria, you may well be eligible for a HAMP loan modification. There are other secondary factors involved which you can learn more about on the HAMP website. Bear in mind that there is no need to tackle the loan modification process on your own, or to fork out thousands of dollars to enlist the services of some loan modification company, many of which have proven to be nothing more than scams.
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