The Home Affordable Modification Program - the Best Foreclosure Prevention Program Available
The Home Affordable Modification Program (H.A.M.P.) is by far the best foreclosure prevention program available to homeowners. The H.A.M.P. is more likely to lower your house payment than any other program out there. However, there are several things you need to know about this program.
How does this program help me?
This is one of two terrific programs that came out of the Obama Administration (the other is the Home Affordable Refinance Program, or H.A.R.P.). If you are in default on your loan, or if you are in "imminent risk" of default (meaning, you look like you might start having problems making your payments) this program will help you.
This program is designed to get your monthly house payment to equal 31% of your gross monthly income. 31% is considered a house payment a person can afford comfortably. The program will first take your interest rate down to as low as 2%. If that is not enough to reach the 31% goal the program will also extend the terms of the loan out to as long as 40 years. If that still isn't enough to reach 31% a portion of your home loan will be sliced off and put on a "shelf". There are no payments due on that portion of the loan and no interest accrues. You will be asked to pay it off if you sell or refinance the house in the future. However, there is something you need to know about this program:
While the Home Affordable Modification Program is technically available to all homeowners you want your loan to be owned by either Fannie Mae, Freddie Mac or FHA. If one of these agencies owns your loan then it is the law that they offer the program to you. What if your loan is not owned by one of them? Then it is not mandatory that your lender offer the program to you and so far we have not heard of any lenders offering the program voluntarily. As you try to save your home it is imperative that you find out who owns your loan since this determines what programs are available to you. This will be the single, most helpful step you will take during your quest to save your house from foreclosure. Important - Who you mail your payments to is your servicer, not who owns your loan!
Who should I contact?
Only your servicer can do this program. Your servicer is the company you mail your monthly mortgage payments to. Get out your monthly mortgage statement and call the customer service number on it. Ask to apply for the Home Affordable Modification Program. It is often their "loss mitigation" department that handles these types of programs so they might transfer your call there. If you are a Fannie Mae or Freddie Mac owned loan the servicer will know what you are talking about. If you are an FHA owned loan you might have to remind them that FHA adopted the program recently. If you are not owned by any of them, you will have to be a little more persistent and maybe talk to a supervisor. The chances of them offering the program are not good though.
What should I expect?
You will need to have patience. It is a very complicated, hands on process. The servicers will be overwhelmed and it could easily take several months. However, while your application is being processed temporary payment relief may be granted. Also, they will usually stop any foreclosure proceedings while they analyze your application. They will be asking you to provide financial documents, fill out some forms and provide a "hardship" letter explaining your situation. They will provide you with the list and instructions.
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Need to find out who owns your loan? The website SavingTheHouse.org will answer that question and more.
Over recent months many Government and private programs have been developed to lower mortgage payments yet most homeowners don't know how to find them. This site has done all the research saving a homeowner weeks of confusion and phone calls. On this site a homeowner answers 3 simple questions to learn:
* Which programs are available to them.
The site is also free to use.