About Federal Home Loan Modification

Recently the Obama Administration introduced two loan modification programs known as the Federal Home Affordable Modification - HAMP Program and the Federal Home Affordable Refinancing - HARP Program. Both mortgage loan modification programs were launched in March 2009 and provide help for homeowners who need to make changes to their mortgages in order to able to continue to pay them. These two programs are designed to provide homeowners facing possible foreclosure an opportunity to keep their home. To take advantage of these programs, a homeowner must qualify.

What Is The HAMP Program?

The HAMP Program is a mortgage modification helping homeowners who have suffered financial hardship including loss of a job, death of a spouse or loss of household income. It is a loan alteration help to get their home mortgage modified without having to refinance.

HAMP Eligibility Requirements

• Must be living in your property when you apply and its your primary residence
• Obtained your mortgage before January 1, 2009
• Your mortgage balance is under $729,750 for a single family residence, $934,200 for a duplex, $1,129,250 for a triplex and $1,403,400 for a 4 unit home
• Your mortgage payment (including principal, interest, taxes, insurance, home owners association dues) must exceed 31% of your gross monthly pre-tax income;
• You cannot afford your current mortgage payment due to a financial hardship which can be documented.

What Is The HARP Program?

One can realize substantial savings on an existing mortgage by refinancing it and paying the "points." This is in effect a fee which effectively lowers the net payable interest rate on the mortgage loan. If you are planning to reside in your home for an extended time, such a long-term plan or strategy can be an effective way to save thousands of dollars.

HARP Eligibility Requirements

• Your mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac. (See below to contact Fannie Mae or Freddie Mac);
• When applying for the HARP Program loan modification help you must be current on your mortgage payments. Current is defined as not more than 30 days late on your mortgage payment in the last 12 months. If you have had the mortgage for less than 12 months, then you cannot have missed a payment;
• Your mortgage balance cannot exceed 125% of your homes value;
• Your income is sufficient to pay back the new mortgage payment;
• Your mortgage loan modification must improve the long term stability and affordability of your current mortgage. An example is your current mortgage is a 10 year interest only mortgage and you are making a loan modification to a 30 year fixed rate mortgage.