HAMP

Getting a mortgage loan modification can be a reality for many borrowers. Lets face it, a refinance is not going to be a reality for most home owners at this moment, this is where a mortgage loan modification can really come in handy. Borrowers are still upside down in their home values, unemployment is still high, and many hard working Americans have watched their credit scores tank in recent years due to the economy. A modification essentially mimics a mortgage refinance; It will lower a borrower’s mortgage payments and bring thire loan current. Not to mention a modification will allow a borrower to not make a payment anywhere from 6 weeks to 2 months and lower their interest rate. These are just some of the great benefits of a modified mortgage.

The Making Home Affordable Modification Program(HAMP) is the most desirable for the simple fact that it will give a home owner the extra incentive to stay current with their mortgage payment once it is modified. The government will pitch in $1000/yr to lower the principal balance for up to 5 yrs as long as the home owner stays current with their mortgage payment once the mortgage is modified. To qualify for the HAMP a borrower must have a housing to debt income ratio of 31% or higher. For example, if a borrower(s) makes $3000/mth their mortgage should be over $930/mth to eligible, $930 is a housing to debt income of 31% with an income of $36,000/yr. The goal is to bring the mortgage payment down to 31% if a borrower qualifies and can submit some general documents, and have been making their payments for the last 6 months. I personally modify mortgages, and I know that not all borrowers will fit in a slot to be modified, and that is why there are other mortgage loan modification programs available to home owners. Non-government modifications are called custom modifications. Custom modifications are the ones that mortgage companies/banks/servicers do on their own, and they are usually fashioned after the government modifications such as the HAMP. If you do not qualify for one of the government program there is no shortage of custom modifications; These are not as rigid as the federal modifications. Your housing to debt income ration can be low, I have even done modifications with debt to income ratios as low as 15%, and these borrowers were granted modifications. Some lenders are really aggressive when it comes to lowering mortgages, but unfortunately not all lenders are the same. If you make a lot of money in comparison to your mortgage payment then your lender’s policy will dictate you qualifying for a mortgage loan modification, and possibly getting one. It’s always a good idea to check with your lender, or talk to a professional.