Need Mortgage Refinance » home affordable modification program

HAMP and Facing Foreclosure or Unemployment

Brian — Fri, 16 Jul 2010 15:23:07 +0000

There have been some new initiatives creeping into the Home Affordable Modification Program which you should generally be aware of, especially if you are facing foreclosure or have recently faced unemployment or even worse been made unemployed.

So first of all, what does HAMP mean to anyone facing foreclosure when their lender has decided to participate in the Home Affordable Modification Program.

Any mortgage provider who participates in the Home Affordable Modification Program cannot refer a loan for a foreclosure sale, or take action on a foreclosure sale for loans that are eligible for the program until the mortgage holder/homeowner has been evaluated for HAMP, and if the homeowner is eligible a trial modification offer has been made.

So once a mortgage servicer participates in the HAMP program they are obliged to make reasonable efforts to get in touch with any homeowners entering the foreclosure stage i.e. the stage where they would previously have been progressed to foreclosure, to find out if they are eligible for the program. This could include personal contact with a homeowner, but that is at the discretion of the lender and is more likely to be in the form of a letter.

So the good news is that while under consideration or during the trial period, you cannot be progressed to foreclosure. Also once in the trial period and after making the first trial period payment, the lender cannot take the first legal action to initiate a new foreclosure. Of course if you fail to make the trial period payments, you will not be offered a permanent modification and you will be back to square one where foreclosure may be progressed.

Secondly with respect to unemployment, if you find yourself unemployed you can ask participating lenders to consider you for a new Home Affordable Unemployment Program referred to as ‘UP’.

If you were already into a trial period with HAMP and lost your job, you can ask to be considered for ‘UP’ only if you entered the trial period before missing 3 full consecutive payments.

It’s also worth checking now if you are eligible for ‘UP’ where you were previously not eligible for ‘HAMP’ because the eligibility criteria is different. In other words if you are unemployed, you may not be eligible for ‘HAMP’ but you may be eligible for ‘UP’ otherwise known as the Home Affordable Unemployment Program.

If all else has failed and foreclosure is looking unavoidable there is another extension to the Make Home Affordable program called Home Affordable Foreclosure Alternatives (HAFA), which provides 2 options to foreclosure. These are a ‘Short Sale’ option or a ‘Deed in Lieu of Foreclosure’ option. Both of which you can find out more about via the link.

Latest News-The Home Affordable Modification Program

Brian — Mon, 31 May 2010 17:42:24 +0000

The numbers, as expected, continue to rise and the information released through April 2010 is that almost 300,000 borrowers have now been granted permanent home loan mortgage modifications. The median for payment reduction is still sitting around 36% which is, in real money, a saving of about $500 per month. This is the same as was reported on the last press release. The big change is really the number of borrowers converting to permanent home loan mortgage modifications with over 68,000 converting during April which is 13% more than in March.

There are some rule changes that new applicants should be aware of which actually come into effect on June 1st. Servicers now require upfront documentation before they can initiate new trial modifications and in practice that means they have been making that request since March 2010. The treasury is monitoring service performance to ensure the borrower demand is met and that modification requests are reviewed in a timely manner. This contradicts most reports from real people on this aspect of the HAMP service where the biggest complaints have been of slow responses and lost paperwork.

Servicers are stating that the most common causes of cancellations include missed trial payments and incomplete or unverifiable documentation. So you can see that getting the documentation in up front for verification should improve the efficiency of the service and ensure eligibility before the process is initiated. As for missed payments, well that is why this criteria was introduced, people have to demonstrate that they can meet the new payments before a permanent loan modification is offered.

There are statistics now available that show servicers who started trials with verified documents generally posted higher conversion rates. This is as opposed to accepting stated incomes, i.e. those that relied on the borrower to disclose their income and didn’t verify the accuracy of those statements before starting the process of loan modification. The figures for the 4 largest servicers using stated income as a basis for trial starts is a less than 30% conversion rate.

This certainly begs the question of whether people may have been overstating their income to try and get on the program, because if they have then it looks like that has seriously back fired on them, to the tune of 70% of applicants in the case of the big 4.

As an aside, it is probably worth knowing that the HARP Home Affordable Refinance Program is due to end on the 30th June 2011, so if you were considering looking into this as an option you are probably going to have to make a move on it pretty soon.

For the full report on the HAMP latest news you can use this link.

$2.7 Billion in Savings via Home Affordable Modification Program

Brian — Fri, 26 Mar 2010 15:46:41 +0000

The numbers are still going up with the latest figures on the Home Affordable Modification Program (HAMP) now stating that more than 170,000 permanent modifications have been passed on to homeowners. This means they are guaranteed lower payments for the next 5 years and the average saving per month is still sitting at around $500 dollars (36% saving on before modification payments) giving a cumulative saving of around $2.7 billion.

The number of permanent modifications that have been approved by the servicers but are still waiting to be accepted by the borrowers has also risen to 91,800 from the previously reported figure of 76,000. The number of homeowners that have received offers for trial modifications is still around the 1.3 million mark which is around 34 to 45% of the final goal which needs to be reached by the end of 2012. A further 72,000 trial modifications commenced in February.

The cancellation figures are pretty low, for modifications converted to a permanent status only 0.9% have been canceled and for all modifications started the number is 8.2%.

A benefit of completing 1 years worth of on time payments is eligibility to earn up to a further $1000 which could be applied to the outstanding mortgage balance, which would further reduce the capital amount owed.

Mortgage Refinancing

Mortgage refinancing through the Home Affordable Refinancing Program is due to close in 3 months in June of 2010. It is reported that over 4 million borrowers with GSE mortgages have been allowed to refinance with average savings of $150 per month which represents savings of more than $6.8 billion in the first year.

You can download a .pdf of the full report here Make Home Affordable

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Home Affordable Modification Program is Working

Brian — Fri, 05 Mar 2010 15:45:44 +0000

The Home Affordable Modification Program (HAMP) appears to be working, the latest press releases are again showing that more home owners have been offered and accepted permanent modifications to the tune of around 116,000. This does not include a further 76,000 that have received offers and just need to sign on the dotted line.

The press release states that in January the number of permanent modifications nearly doubled over the previous month and that over one million trial modifications have started from a total of around 1.3 million that have been offered. Once the trial period is passed the loan modifications are then converted to a permanent arrangement so the number of permanent modifications is set to rise significantly, assuming people get through the trial period.

So, based on this information, the news coming from the Home Ownership Preservation Office is that the Home Affordable Modification Program (HAMP) is doing its job. Struggling families are getting the help they need, they are paying less each month for their mortgages and there are signs that the housing market is beginning to stabilize.

Of course HAMP is just one part of the stimulus package and it was further stated that with all the other initiatives being progressed i.e. support for lower mortgage rates, access to credit, tax credits for home buyers and so on, that more than 4 million have refinanced their home mortgages to more affordable levels. They also state that interest rates are at a record low and that home prices and home sales are on the rise again in an economy that is growing.

More than 940,000 home owners are said to have been helped by the Home Affordable Modification Program, although the average saving is now said to be around $500 per month, a little less than the previously quoted $550 average; but still pretty impressive all the same. As is the quoted figure of an aggregate saving of $2.2 billion. The overall program goal is said to be help for 3-4 million home owners and is considered to be on target given its finishing date of 31st Dec 2012.

Another point worth noting is that the required documentation for the (HAMP) has been streamlined making the process for applying a little easier. Also with more mortgage providers subscribing to the program it is stated approximately 89% of eligible mortgage debt outstanding is covered by the HAMP participating providers.

The other significant part of the Make Home Affordable Progam is the Home Affordable Refinancing Program (HARP), however anyone thinking of applying for this program needs to be aware that it finishes in June of this year (2010).

You can get a copy of the full Making Home Affordable Program report in .pdf format via this link.

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Recent clarification on the Home Affordable Modification Program

Brian — Fri, 07 Aug 2009 11:27:07 +0000

To be eligible for the loan modification program under Obama’s new stimulus package the criteria included the maximum loan amount for a single unit which was set at $729,750.

Recent information now states that the maximum loan amounts for 2, 3 and 4 unit homes has been set as follows: -

$934,200 for a 2 unit home
$1,129,250 for a 3 unit home
$1,403,400 for a 4 unit home

This latest clarification helps define exactly what level of loan is considered acceptable for people who have more than a single unit property, other criteria remains the same including the need for the mortgagee to be resident in at least one of the units as his home.