Labor & Employment Law

How the Home Affordable Modification Program can Help Struggling Homeowners

By Dobin & Jenks

In response to the housing crisis gripping the nation, the Obama administration implemented the Home Affordable Modification Program (HAMP) to stem the growing number of foreclosures in the United States. HAMP is a part of the government's comprehensive Making Home Affordable initiative to help homeowners who are struggling to make their mortgage payments, or homeowners who are facing foreclosure.

In a recent article on the topic, Reuters indicated that over 230,000 of the approximately 1.4 million HAMP mortgage modifications had been made permanent by the end of March. According to U.S. Treasury spokesperson Meg Reilly, "More than 1.1 million borrowers were receiving a median savings of $500 each month.' The Obama administration hopes to help between 3 to 4 million homeowners receive permanent modifications through HAMP by 2012.

The primary objective of HAMP is to help borrowers avoid foreclosure by modifying troubled loans in order to achieve a more affordable payment. Under the terms of HAMP, however, homeowners must meet certain conditions in order to be eligible for a modification.

To be eligible for a HAMP modification, the following conditions must apply:

•    Your are the owner-occupant of a one- to four-unit home;
•    You have an unpaid principle balance equal to or less than:
      •   1 Unit: $729,750             •   3 Units: $1,129,250
      •   2 Units: $934,200           •   4 Units: $1,403,400;
•    You are having difficulty making your mortgage payments;
•    You got your current mortgage before January 1, 2009; and
•    You have a mortgage payment (including taxes, insurance, fees, etc.) that is more than 31% of your current gross (pre-tax) monthly income.

It is important to note, however, that a homeowner does NOT need to be behind on his or her mortgage payments to participate in the Home Affordable Modification Program. If you are a responsible borrower who is struggling to remain current on your payments, or if you are at risk of default due to a financial hardship or recent payment hike, you may be eligible for a HAMP modification. Please use the resources below to learn more about HAMP and the mortgage modification process.

Home Affordable Modification Program – U.S. Government

US mortgage modification program helps 230,000 permanently – Reuters

Home Affordable Modification Program Guidelines – U.S. Department of the Treasury

Full post as published by The Law Planet Blog on May 10, 2010 (boomark / email).