If you are a struggling homeowner looking to take advantage of Obamas mortgage bailout plan, you must be familiar with the government assisted process called HAMP. The HAMP process is responsible for giving 5 million struggling borrowers the opportunity to get Mortgage Loan Modifications. Only persons that were previously late on payments can apply. Here is what you need to know to increase your chances of success:
1) The Homeowners must not have gone more than thirty days late on their mortgage payments, or earlier, on their credit report. The homeowners must be current on their mortgage at the time of the request.
2) The HAMP loan modification is based upon a “no cost” modification. The HAMP modification plan is paid for by the lender by reducing the interest rate, deferring some of the principal balance until a later time, or, in some cases, taking some principal through a refinance transaction.
3) At the end of the trial modification, the homeowners must show that they have continued to pay their mortgage on time since the modification, resulting in an “A” credit result. At this point, the homeowner would no longer be considered a “subordinate beneficiary” of the mortgage, and his request would typically be denied. Once approved for a modification, the foreclosure will be stopped. The homeowner would also receive ” mentors” from the loan workout company during the HAMP process, which is basically the largest financial incentive for the loan modification. This is also a service that most any loan modification company can provide.
4) The Homeowners generally do not have to pay any upfront fees for this program-the lender does not receive any money from you, and will not keep any record of payments that were due. This is a tremendous amount of money to walk away with, and is not received by the lender.
5) The act will only be going into effect in March of 2010. So why not begin the process immediately? Most modifications trials begin in the spring, and it is possible some lenders have started out their programs late and are waiting until the summer to give homeowners the opportunity to request modifications. Unless you are several months delinquent, banks do NOT want to risk either adding more late payments into your already debags collection (another financial motivation for a modified loan), or denying you for the very first time.
Most importantly, you must “BE AWARE” that the lenders may be less stringent with this process compared to a regular modification request. Even “loss mitigation” representatives know that a “no cost” modification is much easier to approve-that is why it is written into HAMP. The additional paperwork, additional contact-making, State authorized processing, and so on are added to the an existing HAMP modification process, making it much to tedious for homeowners this late in their loan due to financial hardships. It is vital for NEW homeowners to get “in the know” of right procedures initially to improve their chances of success.
If you are struggling AND you are NOT yet late on your payments, HAMP is a great avenue to successfully address your “hardship”-that is your reasons for needing help either short-term, medium-long-term, or even permanent. This program addresses success resiliency and is certainly a great much needed service for many homeowners.