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Home Affordable Modification Program (HAMP)

The Home Affordable Modification Program is also known by its acronym HAMP. This stands for a program created by the United States government. They founded it in order to assist those homeowners who were struggling to keep up with their mortgages. For any homeowners who have watched in dismay as their financial conditions deteriorated since they originally purchased their house, they could be able to qualify for loan modifications to make keeping the home possible and affordable.

The program actually helps participants by allowing them to reduce their monthly mortgage payments. This happens as the program approves a lower rate of interest, extends the mortgage’s time frame (and term), or alters the type of mortgage to fixed rate from adjustable rate ARM. In some cases, two or even three of these changes may be approved together. The modifications can happen because the United States government backs them.

The Home Affordable Modification Program began as the Departments of Housing and Urban Development HUD combined forces with the Treasury in order to forge a new initiative that they named Making Homes Affordable. Though there were other parts to this ground breaking concept, the HAMP proved to be a key pillar of it. The government recognized in the wake of the Great Recession that many Americans were only one accident, job loss, or illness away from falling hopelessly behind on their mortgages and payments. This is why they decided to come up with their innovative program for modifying mortgages to make them more affordable for those who are in the most need of help.

Becoming eligible for this home modification assistance program requires an applicant be able to successfully meet a particular set of criteria. They must have bought and financed the house before or on January 1st of 2009. They have to be capable of proving a real financial hardship that makes them struggle to meet their monthly mortgage payments. At the same time, they have to show that they are already behind on the monthly payments or even at risk of sliding into foreclosure of their home. In order to successfully qualify, the property can not have been condemned. They may not owe more than $729,750 on the primary residence which is a single family home. Finally, applicants may not show any personal real estate fraud convictions from any time within the past ten years.

If they meet all of these exacting criteria, then interested parties are able to call their specific mortgage servicer to inquire about any additional requirements that could exist with their particular company. It is also important to inquire if the mortgage servicing company even participates with the Home Affordable Modification Program in the first place. If the provider does participate and the applicant actually meets all of the minimum requirements for participation, then the home owner will need to speak with his or her lender in order to obtain all of the necessary paperwork and forms to enroll.

These forms include first the Request for Mortgage Assistance Form, or RMA. There is also the Income Verification Form as well as the IRS’ 4605T-EZ form to complete. It is important to note that the final application does not get submitted to the government, but instead to the mortgage servicer. They will require a tangible proof of financial hardship when the individual submits this application.

There are actually a number of key benefits which this Home Affordable Modification Program delivers for successful applicants. They are able to sidestep foreclosure of the home, reduce their costs for keeping the house, obtain a new start on the mortgage, and better their credit history and rating. The home loan will be made to work for the owners so that they can simply modify the mortgage instead of losing the house.

Though the program is one that has helped a number of Americans, it is not the foolproof answer to irresponsible home buying and borrowing. There have been a number of homeowners who availed themselves of the program in HAMP only to re-default a second time. Some of these have actually forfeited their homes in the foreclosure process. The program has been shown in a recently conducted study that it can help a number of the fully 20 percent of homeowners who are not saving money which they might be able to by taking advantage of either a loan modification program such as this one or through refinancing their home.

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