Applying for a Loan Modification under HAMP

HAMP or the home affordable modification plan is tailor made for those in deep financial distress. The program is targeted at those who are at risk of losing their houses and seek to modify the loan to their advantage. You need to be clear about the application requirements and procedure for HAMP.

Eligibility

Make sure you qualify according to the eligibility criteria for this scheme. You need to have a loan on your home that serves as your residence. The loan needs to have been sanctioned before the first of January, 2009. For a single family unit, the amount passed as loan must not have exceeded $729,750. You must be able to prove that your financial situation is adverse and that the payment made towards your home mortgage is more than 31% of your total monthly income. All these conditions must be fulfilled to make you eligible for this program.

Approach Lender

Approach a trusted loan modifying agent or lender and ask for the steps you need to follow for application for HAMP. Make sure you file a hardship affidavit in court. A letter stating the reasons you are finding difficult to afford the payments on your loan has to be written as well. The reasons must be strong and valid. Try to write as convincingly as you can, since this part determines if your application is considered at all.

Documents and Procedure

Make a personal balance sheet of your earnings and expenditure of the past financial year. A borrower’s statement must be completed so that all important information regarding finances is clear to the reviewers of your application. Copies of your recent bank transactions or statements must be kept handy. Your income proof must be available too. Make sure that you decide on how much you can actually pay on your mortgage. Be as realistic as possible in this regard.

Calculate your debt ratio as well, so that you can decide on your target payment after modification. The financial statements along with your budget need to be adjusted so that the disposable income amount that you have, is correctly shown with the target payment set. Before final submission, decide upon all this.

In order to be sure that you have figures that are perfect for the program, you can check the HAMP software programs that follow the guidelines to the hilt and prepare a perfect statement. You need to enter the income per month and the expenses, for the calculations to be automatically performed.

Warning

Work with no third party or attorney on this application. Simply seek the help of your lender. There is no need to pay any amount as fees to any outside authority in any stage of the application process. Be prepared to wait for some time for approval of the application. Patience might actually be your key to a HAMP approval. Check with the bank every 2 days to see where your application has moved to. A month is the maximum that you have to wait for knowing if the application has been approved.