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In danger of losing your home? Consider this alternative.

If you’re struggling to stay current on your mortgage payments, or you’re already behind, you will want to know about the Home Affordable Modification Program (HAMP), a federal program that makes it financially attractive for banks and other mortgage lenders to modify existing mortgages and help homeowners like you avoid foreclosure.

Qualifications for HAMP

To qualify for a HAMP loan modification, you must:

  • Live in the home, which is your primary residence
  • Owe $729,750 or less for a single family home
  • Be dealing with a financial hardship such as job loss, divorce, or medical emergency
  • Have taken out your current mortgage before January 1, 2009
  • Have a payment on that first mortgage (principal, interest, taxes, insurance, condo fees) that is greater than 31% of your current gross income

Here’s what it means

Depending on your bank and you qualifications for the program, the loan modification may:

  • Include all missed payments and back taxes in a single loan
  • Lower your interest rate
  • Lower your monthly payments
  • Extend the terms of the loan
  • Possibly reduce the principal of the loan

Contact us for more information or read more.

you need ot behind on mortgage payments

Suppose you're already struggling, or know you will be, and that it will soon be difficult for you to make your mortgage payments. This may be due to a sizeable increase in your mortgage payment, a reduction in your household income, or some other hardship that makes it difficult for you to pay your mortgage. Known as "imminent default," this situation may qualify you for the HAMP loan modification program. After you document your income and expenses and provide evidence of the financial hardship, the bank will determine whether your loan meets the minimum eligibility criteria.

Inability to make payments during trial period

To turn the trial period into a permanent modification, it’s very important to make your payments in full and on time. If you can’t make three payments by the end of the trial period, you will lose your eligibility for loan modification under the HAMP loan modification program. If this should happen to you, don’t despair: you do have other options to prevent foreclosure. Check out our quick overview of the short sale, or contact us for more information.

Government incentives for on-time payments

When you make your monthly payments on time, you may be eligible for a “success incentive” that reduces the principal balance on your loan and helps you build equity more quickly. These incentives are applied directly to your loan balance annually over five years, and could total up to $5,000.

The effect on your credit score

Staying current with mortgage on your payments is obviously the best way to maintain your credit. With a loan modification, your loan will be reported as paying during the trial agreement and as modified after the modification agreement is final. Though it may impact your credit score, it will do so far less than a foreclosure, which can have a very negative impact on your credit score for up to ten years.
With a loan modification, you can begin credit repair much sooner.

How to apply

Contact us, and we can help. We’ll will review your situation, make sure you meet the requirements, and let you know what to do next. At Short Sale Liaison, we work with highly qualified attorneys with ample experience doing loan modifications and high Better Business Bureau ratings.

Information you'll need to provide

You’ll need to complete certain financial forms and submit proof of income and residency. The following forms must be also be filled out and signed by all borrowers listed on your loan.

  • Request for Modification and Affidavit (RMA) form.
  • IRS Form 4506-T Request for Transcript of Tax Return

Beware of scams

Beware of anyone except a qualified attorney who charges an upfront fee for housing counseling or loan modification. And beware of any organization that claims to guarantee success – both are strong indicators of scams. Since every foreclosure is a matter of public record, almost anyone can approach you once the case is filed with the courts. No matter how sincere the individuals may seem or how professional their websites may look, if they ask for upfront money, your credit card number, or your signature, they are almost certainly trying to take advantage of you. Whatever you do, do not pay any money or sign any document without first contacting us.

Loan modification options and costs

You have two options:

  • You can normally add late fees and back taxes to the new (modified) mortgage. 
  • Or, you can pay these items upfront, which lowers your monthly payment and, of course, saves you money on interest costs over the life of your loan.

Attorney fees typically cost $1500 upfront and $1500 when the loan is final.
Let us help you navigate the waters and find a capable attorney.
Contact us – we’ve helped plenty of people just like you find an alternative to losing their home.

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