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Home Affordable Modification Program

By Jonathan Boral on June 7, 2010

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A program started under the Obama Administration’s Making Home Affordable Program, the Home Affordable Modification Program (HAMP), was established to help homeowners who are behind on paying their mortgages owned to mortgage brokers. Mainly through low income, economic hardships, or too high of payments, responsible borrowers are eligible to apply for the HAMP.

There are several qualifications to be considered for HAMP, beginning with being the owner of a one to four unit home. Secondly, your mortgage must have originated on or before January 1, 2009. Finally, you must have a mortgage that is more than 30% than your current income, along with an economic hardship that can be documented.

The main purpose of the HAMP is to not necessarily merely to make mortgages more stable for homeowners, but to truly help out those homeowners who are far behind in their mortgage payments. They are truly receiving a second chance on their mortgages, not just giving them a little push in the right direction.

When approved for the HAMP, the government will work with bank and mortgage lender to help give the homeowner a lower mortgage rate. Many times, the rate can go as low as 2%, if this is the rate at which the homeowner will be able to pay the loan on a monthly basis.

Not only does the HAMP help with mortgage payments, but it also gives homeowners the ability to receive financial counseling. This portion of the program helps homeowners understand their rate and what they are paying for. Not only that, but they also help make affordable budget plans for the future and keep the longevity of your mortgage.

Along with these counseling programs, the government also offers incentives to homeowners who participate in HAMP. For every month homeowners stay current with their payments, a portion of their later payments can be reduced or set at a different rate. If your loan goes unpaid three months in a row, then the program ends and you will not be eligible for these incentives through the life of your loan.