Many applicants find the loan modification process to be frustrating and often times feel used and abused by their mortgage servicer. We are on your side! Our loan modification attorneys and staff are trained to effectively and efficiently process files and successfully negotiate reduced monthly payments for our clients. Further, our team will navigate through internal loan modification programs offered by many lenders to qualify our clients who are not able to meet the requirements of the government sponsored programs.
Contact The Sweis Law Office office in Illinois and we will help find the best program for you!
There are many federally sponsored programs designed to keep homeowners in their homes. The most popular among these programs is the Making Homes Affordable (MHA) program also known as the Home Affordable Modification Program (HAMP). There are also programs designed for unemployed homeowners (Home Affordable Unemployment Program or UP) and those who have two mortgages (Second Lien Modification Program or 2MP).
Most federally chartered lenders and their servicing agents participate in these programs. Some lenders even offer principal reduction programs designed to reduce the principal balance on a homeowner’s loan to better reflect fair market value of the home. This program is also sponsored by Fannie Mae and Freddie Mac, making most residential mortgages eligible for consideration. For more information on these programs, please visit hmpadmin.com.
Home Affordable Modification Program (HAMP)
Basic HAMP Eligibility Criteria
- The mortgage loan is a first lien mortgage loan originated on or before January 1, 2009. This includes mortgages secured by:
- Cooperative shares,
- Condominium units, and
- Manufactured housing
“Originated on or before” refers to the date on which the loan was first originated, not by the date a loan may have been modified previously.
- The property securing the mortgage loan has not been condemned or is not in poor physical condition that it is not livable even if not condemned. Servicers must retain in the mortgage file and/or servicing system all evidence related to the basis for the determination of an unlivable condition.
- A borrower has documented a financial hardship and acknowledged that he or she does not have sufficient liquid assets to make the monthly mortgage payments.
Escrow account established
- The borrower agrees to set up an escrow account for taxes, hazard and flood insurance prior to the beginning of the trial period, if one does not currently exist.
Unpaid principal balance limits
- The current unpaid principal balance (UPB) of the mortgage loan prior to capitalization is not greater than:
- 1 Unit $729,750
- 2 Units $934,200
- 3 Units $1,129,250
- 4 Units $1,403,400
Single family property
- The mortgage loan is secured by a one-to four-unit property.
Program cut-off date
- The borrower has submitted an Initial Package on or before December 31, 2012 and the Modification Effective Date is on or before September 30, 2014.
HAMP Tier 1 Eligibility Criteria
A loan is eligible for Home Affordable Modification Program (HAMP) Tier 1, if the servicer verifies that, in addition to satisfaction of the basic eligibility for HAMP described above, all of the following criteria are met as well:
Not previously HAMP modified
- The mortgage loan has not been previously modified under HAMP.
Delinquent or in imminent default
- The mortgage loan is either delinquent or default is reasonably foreseeable. Loans currently in foreclose are eligible.
- Mortgage loan is secured by a single family property that is occupied by the borrower as his or her principal residence. In addition, a loan may be considered for HAMP Tier 1 if:
- The property was originally non-owner occupied, but the servicer can verify that it is currently the borrower’s principal residence.
- The borrower is displaced (e.g., military deployment, permanent change of station order, out of area job transfer or foreign service assignment) but was occupying the property as his or her principal residence in the future and the borrower does not own any other single family real estate.
Minimum monthly mortgage payment ratio
- Borrower’s monthly mortgage payment (including principal, interest, taxes, insurance, and when applicable, association fees, existing escrow shortages) prior to the modification is greater than 31 percent of the borrowers monthly gross income.
HAMP Tier 2 Eligibility
A mortgage loan may be eligible for HAMP Tier 2 if:
- The borrower satisfies the basic eligibility criteria for HAMP.
- The loan did not satisfy the criteria for HAMP Tier 1 or, upon evaluation for a HAMP Tier 1 modification, failed to receive a modification under HAMP Tier 1.
- The following criteria are met, if applicable:
Owner occupied or rental property
- The mortgage loan is secured by a single family property that is either owner-occupied or a rental property.
A “rental property” is a property that is used by the borrower for rental purposes only and not occupied by the borrower, whether as a principal residence, second home, vacation home or otherwise.
A mortgage loan secured by a rental property may be considered for a HAMP Tier 2 modification if the rental property is:
- Occupied by a tenant as their principal residence;
- Occupied by the borrower’s legal dependent, parent or grandparent as his or her principal residence without rent being charged or collected; or
- vacant and available for rent.
A property that is or will be offered for rent and is available for use by the borrower when it is not rented is not eligible for a HAMP modification.
Previous HAMP Tier 2 TPP or permanent modification
- A mortgage loan has not received a permanent modification or TPP under HAMP Tier 2.