Home Affordable Modification Program

src: www.urban.org

The Affordable Home Modification Program (HAMP) is a government program introduced in 2009 to respond to the subprime mortgage crisis. HAMP is part of the Making Home Affordable (MHA) program, established in conjunction with the HAART under the TARP Assistance Program (TARP), part of the Emergency Economic Stabilization Act of 2008. HHF provides targeted assistance to homeowners in the states hardest hit by the economic crisis and working together with HAMP and most of the MHA programs.

HAMP (and the entire MHA Program) is set to expire on December 31, 2016, the last day to file an application, and the Effective Date of Modification must be on or before September 30, 2017. HHF has been extended to 2020.

Video Home Affordable Modification Program

Destination

The Affordable Home Modification Program (HAMP) is designed to help homeowners struggling financially to avoid foreclosures by modifying loans to an affordable level for current and sustainable borrowers over the long term. This is done by reducing interest rates, fixing interest rates, reducing or major patience, and extending the time period. The program provides clear and consistent loan modification guidelines and includes incentives for borrowers, servicers and investors.

In previous years, property with a loan to be modified should be your primary residence. In June 2012, HAMP was significantly revised to expand the scope of the program and clarify some disturbing issues. The Tier 2 modification program begins by allowing modifications to lending on properties that are not occupied by the owner and also allowing some loans for some modified properties. Pre-existing rules for owner-occupied properties are now under the umbrella of Level 1 modifications.

Maps Home Affordable Modification Program

Rules

The MHA Handbook, is a consolidated reference guide outlining the requirements and guidelines for the Affordable Housing Program (MHA) and especially HAMP, the most popular component. A complicated calculation called the net present value test (NPV) is the foundation of the HAMP program. Level 1 and Level 2 have their own NPV tests. The NPV test gives a predicate modification on whether investors will make more money by modifying the mortgage than it seizes.

src: www.gsb.stanford.edu

Feasibility requirements

HAMP complies with the following eligibility and verification criteria:

• Loans originated on or before January 1, 2009
• First-lien loan with unpaid principal balance of up to $ 729,750
• Higher limits are allowed for properties with 2-4 units
• The property can not be disappointed or uninhabitable
• Debt borrowers (housing debt for loans to be modified) into income ratios must meet certain standards that indicate financial difficulties. Over the years, the ratio should be more than 31% of gross revenue, but it now varies based on whether you qualify for Tier 1 or Tier 2 modifications.
• All borrowers must document revenue, including the signed IRS 4506-T, provide proof of income (ie salary, profit and loss statement, etc.), and sign a statement of financial difficulties.

src: i0.wp.com

Sunset from the program

At the Greenlining Institute 22 Economic Annual Meeting on May 8, 2015 Mel Watt announces that the program will be discontinued at the end of 2016. The FHFA Director said this regarding the program:

"Although the number of new borrowers entering both programs continues to decline, in part because many eligible borrowers have taken advantage of it and partly because of the recovery of house prices, lenders and servicers continue to approve new HAMP modifications and HARP Removals Extend HAMP and HARP to the end of 2016 will provide real assistance for borrowers who continue to face the challenges of either paying the mortgage or refinancing their loans.

src: www.wikihow.com

Second loan modification

After the first loan is changed under the HAMP, if the second loan is eligible (and in many cases it is a loan), it is either modified or partially or completely extinguished. The program will also expire on 31 December 2016.

src: image.slidesharecdn.com

See also

• Modified loans in the United States
• Affordable Financing Program (HARP)

src: i1.wp.com

References

src: i.ytimg.com

External links

• Makinghomeaffordable.gov
• Creating an Affordable Servicers Loan Handbook

Source of the article : Wikipedia