The Home
Affordable Modification Program
or
HAMP
is intended to rescue as many as Several Million financially stressed homeowners escape foreclosure by modifying the current mortgage to a reasonable amount that is very affordable in favor of borrowers at the present and maintainable over the Extended term. The program offers understandable and dependable loan modification principles that the complete mortgage industry can apply.
Borrower qualification is concluded when meeting particular criteria together with:
1) Borrower is past due on their mortgage or faces forthcoming chance of non-payment.
2) Property is occupied as borrower's primary residence.
3) Mortgage was created on or prior to Jan. 1, 2009 as well as the outstanding principal balance ought to be no larger than $729,750 for one-unit properties.
After deciding a borrower's eligibility, a servicer will assume a progression of actions to change the month to month mortgage payment to 31% of a borrower's whole pretax monthly revenue:
Initially, decrease the interest rate to as low as 2%,
After that, if needed, expand the mortgage term to 40 years,
As a final point, if needed, abstain (postpone) a segment of the principal until the mortgage is paid off as well as waive interest on the delayed total.
Remark: Servicers could choose to pardon principal under
HAMP
on a separate basis or previous to any modification process in order to complete the intended monthly mortgage payment.
The Home Affordable Modification Program
contains incentives and for investors, servicers, and borrowers.