Understanding loan modifications

What is the Home Affordable Modification Program (HAMP)?

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The Home Affordable Modification Program (HAMP) is also part of a federal program to help homeowners.

HAMP encourages mortgage lenders to modify homeowners’ loans so that payments become more affordable—in fact, mortgage payments must be reduced to less than 31% of your monthly income to qualify for HAMP. According to MakingHomeAffordable.gov, HAMP homeowners typically save about $500 per month!

You may be eligible for HAMP if you meet the following basic criteria:

  • You are struggling to make your mortgage payments due to financial hardship.
  • You are delinquent or in danger of falling behind on your mortgage.
  • You obtained your mortgage on or before January 1, 2009.
  • Your property has not been condemned.
  • You owe less than $729,750 on your primary residence or 1-4 unit rental property (loan limits are higher for 2-4 unit properties).

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