What is HAMP?
Making Home Affordable is a federal program that offers qualified homeowners a loan modification to help make mortgage payments affordable. This modification is known as the Home Affordable Modification Program or HAMP.
The Home Affordable Modification Program (HAMP) is implemented through a 2009 Making Home Affordable (MHA) program designed to stabilize the housing market and help struggling homeowners obtain relief and avoid foreclosure. (HAMP) provides eligible borrowers the opportunity to lower their first lien mortgage payment to affordable and sustainable levels through a uniform loan modification process. Both borrowers who are current on their mortgage and those who are behind on their payments are eligible for a modification; however, the borrower must demonstrate that default is looming.
Other Program Requirements include, but are not limited to:
- The loan must have originated before January 1, 2009.
- The monthly mortgage payment ratio must be greater than 31% of the borrower’s monthly gross income.
- The loan must be secured by a one-to-four unit property which is the borrower’s principal residence. One-to-four unit investment properties are eligible for HAMP Tier 2 modifications, even if the borrower does not reside at the property.
- Borrowers must submit a hardship affidavit explaining why they cannot make full mortgage payments.
- Borrowers must agree to set up an escrow account for taxes and hazard and flood insurance, if one does not already exist.
- Borrowers must certify that they have not been convicted within the last ten years of felony larceny, theft, fraud, forgery, money laundering, or tax evasion in connection with a mortgage or real estate transaction.