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|FHA HAMP refers to the Home Affordable Modification Option available under The Making Home Affordable Program (MHA) of the federal government. The basic objective of the program is to help homeowners stay in their home despite financial constraints and avoid foreclosures. This objective is achieved by bringing down the monthly payment of a borrower through the vehicle of a loan modification that may also include a partial claim.
One should contact the lender to get details about the FHA HAMP program and whether it is applicable in case of a bankruptcy. Incentives are provided to the mortgagees provided the mortgagors are in imminent default or are with 30 days past due. All necessary information and resources like application forms, FAQ, and calculator are available online at the websites of big lenders like Bank of America and Chase Mortgage. HAMP guidelines can be found on HUD website.
FHA HAMP Program
FHA HAMP program is basically an enhanced loss mitigation option that combines loan modification with a partial claim. The borrowers who meet the eligibility requirements are offered a three or four month trial period. If one is found comfortable with the new arrangements during this period, the changes are made permanent and the loan modification is re-amortized to a 30-year fixed rate mortgage.
Under the program, a change in the payment structure is sought to adjust it to the borrower’s current financial condition. The repayment of a portion of principal amount may be deferred or there may be a principal reduction for up to 30 percent of the unpaid balance. The interest rate should be adjusted according to the requirements laid out in Mortgagee Letter 2009-35.
FHA HAMP Guidelines
The qualifications guidelines to participate in FHA HAMP program include the following:
- The property must be owner occupied.
- The property must be an FHA-insured single family home (1-4 units).
- The borrower must have sufficient resources to meet the payment requirements under new arrangement.
- The default must be due to the financial hardship that the borrower is facing. Proofs are required to support hardship claim.
- In case of death or divorce the current owner(s) of the home must be determined through adequate legal documentation.
- Those who have already modified under HAMP should not apply again.
- There is no credit history or appraisal requirement for the approval.
Make sure that you fulfill all the eligibility requirements before making an attempt to apply. Ensure that you have enough proof to establish your qualifications for the program; otherwise your application may be denied.