Written by attorney John P. Brooke

Do You Qualify for a Loan Modification under HAMP (Home Affordable Modification Program)?

Loan Modification Requirements Under the

Home Affordable Modification Program

  1. The property you are seeking to modify the mortgage MUST be a owner occupied property (No investment or second properties).
  2. You must have sufficient documented income to support a modified payment.
  3. You must've had a financial hardship and be delinquent or at risk of imminent default.
  4. Your mortgage had to have originated on or before January, 1, 2009.
  5. You can only modify your first mortgage only.
  6. Your current mortgage payment is currently more than 31% of gross monthly income (expenses are not considered in the modification analysis).
  7. There is a three month trial period before the modification becomes permanent.

Documents needed for loan modification by the mortgage bank:

  1. Two pay stubs
  2. Two bank statements
  3. Tax returns (4056T)
  4. Hardship affidavit
  5. RMA (request for modification and affidavit)

HAMP “Waterfall"--Banks will start out with option #1 and work there way down the "waterfall" until the target mortgage payment of 31% of your gross income is reached.

  1. Take arrears and add to principal and recapitalize
  2. Cut interest by 1/8% steps to as low as 2%
  3. Extend loan terms by up to 40 years
  4. Defer portion of principal, interest-free, until loan is paid off.

**HSBC, Beneficial, Household, TD Bank did not take bailout money so there is no HAMP, although they have their own in-house loss mitigation departments and MAY modify your mortgage under similar circumstances as HAMP.

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