The federal government, through the U.S. Treasury Department, has established three programs to help homeowners who’ve defaulted on their mortgage, may default on their mortgage, or owe more than their home is worth. These programs, often known by their
acronyms, are the Home Affordable Modification Program (HAMP), Home Affordable Refinance Program (HARP), and Home Affordable Foreclosure Alternative (HAFA).
HAMP – Home Affordable Modification Program
If you are working (or have some other source of reliable, verifiable income) and you’re still struggling to make your payments, you may be eligible for the Home Affordable Modification Program (HAMP®). The object of the Home Affordable Modification is to lower your monthly payment to an affordable level so that you can comfortably keep your home.
The general HAMP guidelines are set forth below (but keep reading to learn about the expanded guidelines that went into effect on June 1, 2012):
You may be eligible for HAMP if you meet all of the following criteria:
- You obtained your mortgage on or before January 1, 2009.
- You owe up to $729,750 on your primary residence or single unit rental property
- You owe up to $934,200 on a 2-unit rental property; $1,129,250 on a 3-unit rental property; or $1,403,400 on a 4-unit rental property
- The property has not been condemned
- You have a financial hardship and are either delinquent or in danger of falling behind on your mortgage payments (nonowner occupants must be delinquent in order to qualify).
- You have sufficient, documented income to support a modified payment.
- You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.
As of June 1, 2012, the guidelines have been expanded to help homeowners who may have been previously
declined or disqualified. If you currently occupy your home as your primary residence, or you own a property that’s rented or will be rented, you may be eligible. Even if you’ve previously applied and were turned down or fell out of the program after approval you may be eligible for reconsideration. For example, was your debt-to-income ratio below 31%, or you defaulted on your trial payments – you may now be eligible. Were you previously turned down because the subject property was a rental home, or were you granted a permanent modification and subsequently defaulted – you too may now be eligible for reconsideration.
