Home Affordable Modification Program (HAMP)

Written By: Glenn Michaels, Op-Ed Writer

While driving to work virtually every day I hear numerous advertisements for borrowers to apply for or to apply for a mortgage modification.  

The general public and mortgage professionals are unaware of the rules in order to obtain a Home Affordable Modification Program mortgage loan. Unsuccessful mortgage brokers and mortgage loan originators for a while were popping up everywhere and charging upfront fees while often making all kinds of promises and very often not fulfilling these promises. 

Unfortunately I have had friends and relatives approach me after paying significant upfront fees for a loan modification that they do not qualify for or that do not work out as promise. Usually they are embarrassed because they were ripped off and then they come to me after the fact for help because they know I have been in the mortgage industry for more than forty years.

In an effort to educate our fellow mortgage professionals, the HAMP program is not for everyone. There are specific rules that enable or disqualify a borrower from obtaining a HAMP mortgage loan.

A borrower maybe eligible for HAMP mortgage loan if they meet the following criteria:
Because of a financial hardship, the borrower is struggling to make their mortgage payment.
The borrower is delinquent or in danger of falling behind on the mortgage.
The borrower obtained their mortgage on or before January 1, 2009.
The property has not been condemned.
The mortgage balance is $729,700 or less on their primary residence or one to four unit rental property (loan limits are higher for two to four unit properties).
The borrower has not been convicted within the last 10 years of a crime in connection with a mortgage or real estate transaction.

If a borrower meets the above criteria and has a conventional mortgage, they should contact their mortgage servicing company about obtaining a HAMP loan.

The borrower will have to compile for the initial HAMP application package the following:
Request mortgage assistance.
Complete and sign the IRS form 4506 – T – EZ or 4506T.
Income Verification.
Speak with a housing expert to better understand their options.
Contact their mortgage servicer to submit their application for mortgage help.

Applying for a HAMP modification is a very important first step to getting a borrower to a more affordable mortgage, but getting a modification is just the beginning. It is important that the borrower take the steps necessary to maintain their good standing in order to fully benefit from the advantages of HAMP.
Fully understand the terms of their mortgage.
Make their modification payments in full and on time.
Prepare now for future payment changes.
Allow the borrower the chance to improve their financial health for long time success.

About The Author

Glenn Michaels - As an op-ed writer, Glenn Michaels is a mortgage underwriting instructor for CampusUnderwriter (www.MortgageUnderwriter.org). As a BBA & FHA DE Underwriter, Glenn is a Pace University graduate who also graduated from New York University’s School of Mortgage Finance. Glenn has conducted numerous training classes and has worked in the mortgage banking industry for 38 years. 

Opinion-Editorial (Op-Ed) Disclaimer For NAMP® Library Articles: The views and opinions expressed in the NAMP® Library articles are those of the authors and do not necessarily reflect any official NAMP® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMP®. Nothing contained in this article should be considered legal advice.