by Loan Modification information on FHA Making Home Affordable Loan Modification Program (HAMP) provided courtesy of ModificationZoom.com. This is your resource for mortgage loan modification information; be sure to comment the posts that you most appreciate!
Department of Housing and Urban Development Secretary Shaun Donovan proclaimed today the FHA has made changes to its mortgage loan modification plan so that it will more closely imitate President Obama’s Home Affordable Modification Program (HAMP) under Making Home Affordable. It is hoped that the new FHA mortgage loan modificationcourses of action will be in place by August 15th.
How does this be of assistance to you? Well, if you presently own a home mortgage held by the Federal Housing Administration (FHA), you should be able to extensively ease your monthly home loan payments, interest rate, and possibly attain a partial principal forbearance or balance reduction (a decrease in the amount you owe on your mortgage loan), provided you meet the new guidelines.
Homeowners that have successfully gotten a loan modifications through Obama’s Making Home Affordable Program have had marvelous results, many homeowners cuting down their mortgage interest rates to as low as 2% on 30 and 40 year permanent loans, saving large amounts of moneyeach month on their mortgage.
The Recession is a very stirring era for homeowners in FHA loans, as they now as well can attain similar results. Qualifying for the FHA -HAMP can be a little problematic, and there’s a good deal of junk out there on how to successfully modify your mortgage. We’re going to put to rest the buzz, and help you knowhow to get qualified, ModificationZoom style.
Firstly we need to cross the “eligibility” bridge – Your mortgage holder needs to be FHA-Approved to modify under FHA-HAMP. The majority of lien holders that offer FHA mortgage loan programs are qualified. The greatest way to answer whether or not your bank can modify your loan under FHA-HAMP is to call and ask if they take part in the initiative! If your “mortgagee” (lender) is eligible, your next step is to make sure that you are eligible!
Your present mortgage must be an existing FHA-backed single family home loan, and the current home mortgage must be delinquent, meaning that you are 1 payment past due more than 30 days, but less than 12 full mortgage loan payments behind.
Your home must be a FHA insured single family home (1-4 units), home loans previously amended under HAMP do not qualify, you must have had the loan for 12 months, and here’s a great piece of information: There is no net present value (NPV) test for eligibility!
(The NPV investigation is exerciesed to resolve whether it is amenable for your lien holder to change your home mortgage. Under this process, it doesn’t matter if it is financially optimal for your servicer to modify your mortgage loan or not! If you qualify, your mortgage holder should change your loan, despite the amount of equity you have in the house!)
There is no upper limit on home loan amount for loans eligible for loans modifications, and it is not important what your credit score is! There is no valuation needed, and your FHA – HAMP modified mortgage is required to be at a decreased interest rate and payment than what you already have!
For supporting documentation, you will need to present the following:
1) Hardship Letter
2) Income Documentation – Paystubs & W-2s, or Profit & Loss Statements & Full Tax Returns if you are Self-Employed.
3) 3 Months Bank Statements
4) Financial Worksheet of Income & Expenses
5) Hardship Affidavit
So what is going to take place when you get a loans modifications through FHA – HAMP? First, you will be placed in a temporary loan modifications payment plan, and after you make the first 3 payments under your new plan, FHA-HAMP can be fixed for the life of the loan.
Your loan will be changed to a 30 year fixed rate to a (proposed) front end DTI of 31%. You must verify that your back end (proposed) DTI is below 55%.
What precisely does this denote? Your “front end” DTI can be computed by dividing your mortgage loan payment by your gross income. Your “back end” DTI can be calculated by adding all of the monthly payments that show up on your credit report by your gross income – e.g. – credit cards, car loans, and additional loan payments.
Equally, to figure out what your new payment will be, simply multiply your gross income by 31 percent!
Alright, I can appreciate that was a lot of facts, so we’re going to review with a “To-Do List”:
1) Make sure that you possess an FHA loan, and that your Mortgagee (mortgage lender) is FHA – Approved.
2) Your mortgage loan must be at least 1 payment late, but not more than 12 payments late.
3) Make sure your home is 1-4 units, that it is your primary and only residence, that you’ve had the loan for 1 year, and you haven’t previously modified under HAMP.
4) Write out the hardship affidavit, write a hardship letter, document your income, completed a financial worksheet, include bank statements and submit the package to your mortgage servicer!
5) Get your loan modified!
The remainder of the information out there on FHA – HAMP is germane, but not necessarily stuff that has to be understood to get a loan modifications through the government program. For example; your mortgage holder will mold how to get to the goal 31% payment by giving you a 30 yr or 40 yr fixed term and the calculated fixed rate, and may have to lower your principal to help you qualify for the payment you need to be financially stable. For more information, contact ModificationZoom toll free at (866) 760-9099.
ModificationZoom is not a Government Agency, but we do understand the ins and outs and loopholes of FHA – HAMP, and can help you.
Alright, now you’re ready to rock and roll with the FHA Home Affordable Modification Program (HAMP).
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Great post! I believe it is better to ask for help from a consultant or an attorney. They have higher success rate at renegotiating terms with lenders.
Great article. I believe it is more helpful to receive help from a lawyer when it comes to modifying your loan. She can significantly lower your monthly payments
Doesn’t it seem strange that THE ONLY ADVICE government officials give homeowners having mortgage payment difficulties is to tell them to go back to their lender, or through a HUD/FHA Counselor (and then back to the lender) to obtain Home Loan Modification help?
Let’s investigate this for just a moment.
During the home sales boom cycle the lenders became VERY GREEDY. As the opportunity for profits went up, the ethics/legality/morality of the loans they made went down. Later in this process loans were even being made to persons with no jobs and little, or no income at all!
Oh, and where was the government during the loan feeding frenzy? They turned their heads and DID NOTHING!
The reports from borrowers who have completed Home Loan Modifications using these government recommended processes have been streaming in lately. VIRTUALLY ALL OF THESE REPORTS CONCLUDE THAT THE LENDER HAS GIVEN THE BORROWER VERY LITTLE, OR NO HELP AT ALL!!!
But, the government continues to tell borrowers that its assistance and the help of the lender is the best help available! WONDER WHY? IT’S THE MONEY!
Using this same logic, the best way to prepare your income tax and maximize your deductions is to go to the IRS for help!! Why do so many people (even the government officials we are speaking about) hire help to prepare their taxes? SINCE WHEN HAS FREE HELP EVER BEEN THE BEST HELP AVAILABLE?
So, what does the AVERAGE OUTCOME of a Home Loan Modification THAT YOU ACTUALLY PAY FOR really look like?
The firm I work for has averaged monthly mortgage payments reductions from between 20 – 50% for up to 5 years and the conversion of their existing loan to fixed interest rates in the 4 – 5% range for the full balance of the term of the mortgage! These averages come from over 200 completed resolutions!
Our firm is NOT ATTORNEY-BASED, but does have substantial knowledge about specific legal issues. Our firm has reasonable performance guarantees, a 100% Money Back Guarantee and reasonable program fees (well under $2,500).
So, let’s do the math. Say you are a homeowner who has an existing 6.75% fixed rate 30 year mortgage of $200k, that has a payment with interest of $1,298. Using the average results shown above, your new payment at only a 30% modification is $909 for up to 5 years and you will save well over $80,000 in interest over the life of the note!! NOW THAT’S A MORTGAGE MODIFICATION WORTH THE FEES, DON’T YOU THINK??
Ok, so you don’t plan on staying in the house much over 3 years – using these same numbers you will save over $14,000 in monthly payments alone in that time!! IS THAT A MODIFICATION WORTH THE FEES?
The answer is simple folks – THE LENDER AND THE GOVERNMENT THAT REPRESENTS THEM DOESN’T WANT TO GIVE THE MONEY BACK!
I don’t really get into conspiracy theories like the comment above. The government is putting billions of dollars towards saving homes and jobs, why would they want to prevent loan modifications?