Guidelines for Home Affordable Modification Program

The making home affordable program was introduced by President Obama in 2009 to help millions of homeowners from the scourge of foreclosure. Homeowners who have either defaulted on their mortgage loans or are struggling with the payments need to think fast so that they do not fall in the trap of foreclosure and end up losing their homes. The making home affordable program included two sub-categories namely home affordable refinance program (HARP) and the home affordable modification program (HAMP). Home affordable modification eligibility criterion was restricted to those homeowners who had already defaulted on their home loans and were now stuck with delayed payments and increasing interest on the default loan. The refinance program was mainly for those homeowners who were current on their mortgage loans but could foresee trouble in the future or just wanted to lower the interest rate so that the monthly installment could be lowered.

As per the home affordable modification program guidelines in order to be eligible for the home affordable modification plan the homeowners had to meet basic requirement such as owning a mortgage loan that was availed prior to Jan 2009, owing more than 31% on the mortgage loan as compared to ones income, modifying the mortgage loan structure for ones primary residence etc. All these parameters had to be fulfilled if a homeowner wanted to become eligible for the HAMP Program and get a chance to fill out the home affordable modification program application.

After the home affordable modification program application is approved the servicer will ensure that the monthly installment on the re-structured home affordable modification loan is not more than 31% of the borrower’s gross monthly income. This was to ensure that the homeowner was in no way compromising on his basic expenses in order to fulfill the mortgage loan schedule. The home affordable modification program lenders had to participate in the program voluntarily and if they were successful in modifying even one mortgage loan application then they were liable to get incentives from the Government. The entire home affordable modification program HAMP and refinance program was provided stimulus by the Government in the form of incentives so that both the lenders and borrowers participate religiously and with dedication to make it a success.