Home affordable modifications

Can the making home affordable program help me if my loan is not owned or guaranteed by Fannie Mae or Freddie Mac?

Yes. The program helps borrowers who are struggling to keep their loans current or who are already behind on their mortgage payments. By providing mortgage loan servicers with financial incentives to modify existing first lien mortgages, the Treasury hopes to help homeowners avoid foreclosure regardless of who owns or guarantees the mortgage.

How do I know if I am eligible for a modification under the Home Affordable Modification Program (HAMP)?

To apply for a modification under HAMP, you must:

  • Be the owner-occupant of a one to four unit home;
  • Have an unpaid principal balance that is equal to or less than:
    • 1 Unit: $729,750
    • 2 Units: $934,200
    • 3 Units: $1,129,250
    • 4 Units: $1,403,400;
  • Have a first lien mortgage that was originated on or before January 1, 2009;
  • Have a monthly mortgage payment (including taxes, insurance, and home owners association dues) greater than 31 percent of your monthly gross (pre-tax) income; and
  • Have a mortgage payment that is not affordable due to a financial hardship that can be documented.
  • If you answered YES to all of these questions, you may be eligible for a modification under HAMP. Only your servicer will be able to tell you if you qualify.

Do I need to be behind on my mortgage payments to be eligible for a modification under HAMP?

No. Responsible borrowers who are struggling to remain current on their mortgage payments are eligible if they are at risk of imminent default. An example of imminent default might be that the borrower had or will have a significant increase in their mortgage payment that they cannot afford. If you have had or anticipate a significant increase in your mortgage payment or if you have had a significant reduction in income or have experienced some other hardship that makes it impossible to pay your mortgage, contact your servicer. You will be required to document your income and expenses and provide evidence of the hardship or change in your circumstances.

How do I know if my servicer is participating? Are all servicers required to participate?

Participation is mandatory for servicers of loans owned or guaranteed by Fannie Mae or Freddie Mac (Government Sponsored Enterprises or GSEs). Participation in HAMP is voluntary for servicers of non-GSE loans. However, substantial incentives are available to servicers, investors and borrowers who complete modifications under HAMP, and most major servicers already have committed to the Program. A current list of participating servicers is available at www.MakingHomeAffordable.gov/contact_servicer.html. Servicers not currently listed have until December 31, 2009 to opt into the Program.

Servicers of non-GSE loans sign a contract with Fannie Mae, as Treasury's financial agent, through which they agree to review every potentially eligible borrower who asks to be considered for the Making Home Affordable Program. To ensure that a borrower currently at risk of foreclosure has the opportunity to apply for a modification under HAMP, participating servicers may not proceed with a foreclosure sale until the borrower has been evaluated for a HAMP modification and, if eligible, a trial modification offer has been made.

My loan is scheduled for foreclosure soon. What should I do?

If you are at risk of foreclosure, participating servicers may not proceed with a foreclosure sale until you have been evaluated for a modification under HAMP, and, if eligible, offer you a trial modification.

However, borrowers whose loans have been scheduled for foreclosure or any borrower that has missed one or more mortgage payments and has not yet spoken to their servicer should contact them immediately. Borrowers may also contact a HUD-approved housing counselor by calling 1-888-995-HOPE (4673).