HAMP 2 Mortgage Modification News

by Victoria from Palm Beach County, FL

Ask Kate about HAMP 2 Mortgage Modification News: Hi Kate, Thanks for your wonderful website. Since my mortgage loan is not a Freddie Mac or Fannie Mae, what non-GSE options are available for me? I first applied for the HAMP mortgage modification 2 years ago. But my lender created an income error in my application processing. New! The HAMP program deadline has been extended to December 31, 2016!


2013 National Mortgage News - Streamline HAMP Modification

Freddie Mac (effective May 2013) and Fannie Mae (effective July 2013) no longer ask for paperwork from struggling homeowners applying to modify their mortgages.

Existing mortgages must be 1 year old, at least 90 days late but no more than 720 days delinquent. Proving a hardship is no longer a requirement.

Take advantage of the sudden about-face in HAMP guidelines to get an affordable house payment and avoid foreclosure. Do it before the mortgage giants change their minds and start asking for reams of paperwork again! Streamline modifications expire August 15, 2015.

Victoria continues... As a result of the lender's refusal to correct the error, I can't find any programs that seem to apply to my situation. My lender began refusing payments as of May 2011.

Until that time I was current and making all Trial Period Plan (TPP) house payments.

Now it seems this foreclosure situation has been forced upon me because they have demanded the difference between the original payment amount and my TPP.

But I do not have the lump sum of $15,000 they demand. I have appealed to the Attorney Generals, White House, politicians, and the Treasury Department.

Nothing has helped. What can I do?

Kate Answers: HAMP 2 Mortgage Modification

Ask Kate at Get-Your-Best-Mortgage-Rate.com

Dear Victoria,

These days I feel both relief and distress.

I'm reassured knowing of homeowners who are refinancing, avoiding foreclosure, and securing affordable mortgage payments.

But I'm distressed by loan modification experiences like yours. Clearly, the system has failed you. But let's see if I can point you in a direction that hopefully will end in successfully saving your home.

So let's take a look at what's new and what's improved on the mortgage loan modification front.
This is about HAMP Phase 2 Loan Modification not HARP 2.0 Refinance! Do not get the two confused as they are two totally separate loan products with different requirements and outcome.

HAMP Phase 2 Loan Modification Brings Choices to Homeowners

Until (if) we see the Proposed Obama Streamline Refinance come to fruition, modifying a mortgage is an option for homeowners with or without Fannie Mae, Freddie Mac, FHA, VA, or USDA government sponsored entity (GSE) financing.

This financing can be done through Making Home Affordable Modification Program (HAMP) or directly through a homeowner's lender usually via their loan servicer.

Keeping this in mind, it's interesting to note that in 2011, loan modifications done directly through loan servicers outnumbered those completed through HAMP by two-to-one.

Loan Modification Through Your Lender

Before President Obama initiated the Making Home Affordable Program in 2009, distressed homeowners were on their own in convincing a lender to turn an exploding mortgage (a Donald Trump term) into an affordable home loan.

Thousands of companies sprung up overnight charging mega bucks to negotiate modifications on behalf of homeowners. Lack luster results followed.

Under this backdrop, I wrote an article asking not could but should you try to handle your own mortgage loan modification and avoid the massive fees charged by negotiation companies.

But with twice as many homeowners going straight to their own lender to negotiate a mortgage modification, Making Home Affordable wants a bigger piece of the pie!

So in an effort to help more homeowners afford their payments and strengthen local communities, HAMP Phase 2 was announced March 9, 2012. Bigger. Better. Expanded to assist more homeowners affected by the housing crisis.

But eligibility first. You may be eligible to be considered for HAMP if: What can the expanded HAMP do for the fragile housing market that the original program couldn't?
  1. HAMP Phase 2 extends through December 31, 2016.

  2. Lending personnel are trained so that homeowners across the nation are approved or denied based on the same criteria. (Sounds like a good idea!)

  3. There is also triple the compensation to investors to increase principal reductions of mortgage balances, including the Fannie Mae or Freddie Mac loans. (GSE loans were not eligible for principal reductions before HAMP Phase 2.)

  4. It has more flexible debt-to-income guidelines beyond the 31 percent debt-to-income requirement. So borrowers struggling to make ends meet will get a more in-depth consideration.

  5. Homeowners who currently have or plan to have tenants may still be eligible.

  6. This is promising solution available to homeowners who didn't complete their original HAMP trial period.

  7. Homeowners who fell out of permanent loan modifications because of missed payments may also be eligible.
What's your next step? Contact your lender to see if they participate in HAMP. If not, see if they provide modification alternatives of their own.

Because you will be modifying, not refinancing your mortgage, it is always wise to ask of any adverse affect on your credit scores and history.

If you qualify for HAMP and have a 2nd mortgage, you may also qualify for the Second Lien Modification Program, also known as 2MP.

There are also loan modification programs for homeowners with FHA, VA, and USDA financing.

How to Find Mortgage News and Announcements Here

Check in often with my Best Mortgage Rate Blog for mortgage news and announcements.

For instance, I watch for updates on the Proposed Obama Streamline Refinance which offers hope to homeowners with non Fannie Mae and Freddie Mac mortgages.

Then I report the news at my mortgage blog. So this is an easy way to scan Get-Your-Best-Mortgage-Rate for what's new!

Good luck and best wishes to you,

Ask Kate


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Anyone can ask Kate a question or add a comment. (To comment, look for the link at the bottom of this page.)

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Comments for HAMP 2 Mortgage Modification News.

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Balloon Payment
by: Betty W from Omaha, Nebraska

Hi Kate, I have a balloon payment I cannot pay.

I got caught up with a predatory lender. I thought my payment would be finished in April 1st 2014. To my surprise, the representative told me I have a balloon loan. I was told I am eligible for a Loan Modification Tier 2.

Will this Tier 2 loan modification help me keep my home?

Hi Betty, Kate here...

HAMP mortgage modification will modify the terms of your existing home loan, with the goal of giving you a monthly payment that is affordable.

But it's a must to read the terms of the modification so you aren't surprised again with balloon payments or adjustable rates, for example.

Best wishes, Kate

Refinance or Relief on My Current Mortgage
by: Ronald from Port Jefferson Station, New York

Hello Kate, I am in a unique position here and wondering if there is any hope or solution for me. I have a home owned and in my possession since 1987. The balance on the mortgage is $60,000 and the homes valued at $325,000.

I have approximately 8 years left on the note. I like countless others are in the foreclosure process, and in default about 15 months. I am in court and my case has just been thrown out of the conference phase, and my plan is to resubmit my reinstatement package due to a change in income. My credit score has obviously been affected, and I am unable to refinance my loan. I was recently told about a government program HARP 3.

Could you elaborate on my situation, and any advise or hope you could enlighten me with, I would be most grateful. I am almost convinced the only way out of my mess is to sell my home ASAP. Words of wisdom for me please young lady (smile). Ronnie

Hi Ronnie, Kate here...

The first action I suggest is to place a call to a HUD housing counselor, trained in Making Home Affordable options. There's no charge for the specialized counseling. For details, go to Free Making Home Affordable Housing Counselor Help.

You can also read the latest in a round of proposals for HARP 3 at Responsible Homeowner Refinancing Act of 2013.

But because HARP 3 is only in the proposal stages, also ask the housing specialist about HAMP Mortgage Loan Modification, a program of Making Home Affordable. (You can also read about it on this page.)

And thank you for the compliment. You made my day. (smile)

Best wishes, Kate

P.S. If you find the only option is to sell your house, I'd do it in conjunction with your lender to stop foreclosure proceedings.

Because you have equity in your property, I doubt it would fall under real estate short sale guidelines. But I'd contact the lender even so and ask if you qualify for Home Affordable Foreclosure Alternatives (HAFA). Read about HAFA relocation money here.

VHDA Loan Modification DENIED
by: Anonymous

Hello. I have been in my home for 3 years now. Last year my mother moved in and I am 100% responsible for her now. She is 74.

Maybe I filled out my packet wrong but I was denied by the Virginia Housing Development Authority. Can I appeal or apply again?

Hi, Kate here...

Yes, you can appeal the loan modification denial. But why not take advantage of the HUD-approved housing counselors provided through the Making Home Affordable Program for one-on-one assistance?

Call the Homeowners' Hope Hotline at 888-995-HOPE (4673) or for hearing impaired, 877-304-9709. Ask for 'MHA Help' to escalate your case.

First, go here for a helpful list of documents required by HAMP to have in front of you before calling a counselor.

Best wishes, Kate

Conventional Mortgage Loan
by: savas

Hi Kate, This is Savas. I have got my loan from VHDA (Virginia Home Development Authority) in 2006. I have been living in the house with my family.

I had financial hardship in 2008. I called VHDA about it. They said they do not apply HAMP, because they do not provide loan by Freddie Mac and Fannie Mae, that's why my loan is conventional loan. (Note from Kate: See below)

After that they modified my loan and also gave me $17,500 loan without interest. This made my monthly mortgage $500.00 less for 3 years. But now I have to pay for mortgage as same as 3 years ago I used to. Now my financial situation is same as 4 years ago.

I am eligible for HAMP and HARP, but they do anything for me, because my loan is not owned by Freddie Mac and Fannie Mae. (Note from Kate: See below)

Please give advise. Thanks.

Hi Savas, Kate here. Let's see if I can straighten out some inconsistencies. Follow the links to further information on my website.

1. Programs available for first time home buyers through VHDA include 30 year conventional fixed rate mortgages, FHA financing, VA home loans, and RHS, Rural Housing Services.

2. Homeowners must currently have Fannie Mae or Freddie Mac loans to be eligible for HARP 2 refinance program.

3. For struggling homeowners with hardships to be eligible for HAMP loan modifications, the mortgage does not necessarily have to be owned by Fannie or Freddie but participation by loan servicers is voluntary.

4. You received some type of loan modification in 2008. The loan terms sound very much like the HAMP program.

5. With the Tier 2 feature added to the HAMP modification plan, struggling homeowners can go back to their loan servicers to modify their mortgage a 2nd time if their payments have become unaffordable. Read the information above.

So call back Virginia Home Development Authority (or the loan servicer to whom you make your mortgage payment) and tell them you are interested in HAMP Tier (or Phase) 2, a second chance for struggling homeowners to get affordable monthly payments.

I hope this helps and wish you well.

Kate

Mortgage Modification vs HAUP
by: tonya s

I have had 3 loan modifications according to my mortgage company. I disagree, they said all of my loan modifications were done in 2009.

I talked with my HOPE counselor and she said that I am eligible under HAMP TIER 2 for a loan modification. My mortgage company would not give me the HAMP TIER 2 modification. Are they right by not giving me the HAMP TIER modification?

My husband has been unemployed and they say I can apply for Home Affordable Unemployment Program (HAUP).

Hi Tonya, Kate here.

Either your loan servicer modified your loan 3 times or they didn't! There is no middle ground. To settle the controversy, request copies of the paperwork with your signatures and the dates authorizing 3 loan modifications to your mortgage.

If there is another reason your servicer refuses to modify your mortgage, find it out and write me back by using the Comment link at the end of this page.

HAUP, Home Affordable Unemployment Program, Home Affordable Unemployment Program reduces mortgage payments up to 31% of your income or could possibly suspend them for 12 months or longer. Learn other Making Home Affordable options by going to this page on my website, HAMP vs HARP 3 with Bankruptcy.

By the way, you do not need to have a HAMP modification to utilize HAUP.

Best wishes, Kate

I'm Confused and Stressed Out
by: DT

You said that Obama allowed non Fannie and Freddie backed loans in the new Harp 2.0 but isn't it right there in the first requirement?

Do I understand that if my income is gross $11800 per month and my house payment is $3163.90 per month, I might qualify under the new Obama plan? Gross or net income?

Thanks DT

Hi DT, Kate here. The program discussed on this page is HAMP modification.

Do not get it confused with HARP refinance for Fannie Mae and Freddie Mac mortgages only.

Also, do not get this program confused with the Proposed Obama Streamline refinance!

Only a lender can say if your income and debt-to-income ratios qualify because of the many ifs, and buts. Gross income is generally used for underwriting except for the self-employed.

Your lender will probably have you work with its loan servicer for HAMP or their own modification alternatives if you are interested in pursuing this.

You can also speak directly with a HUD counselor at 888-995-HOPE (4673).

I also announce Making Home Affordable Local Community Events where homeowners get face-to-face immediate help.

Best wishes, Kate

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The information you obtain at this site is not, nor is it intended to be, a substitute for financial, lending, real estate, or legal advice. Mortgage rates and trends are published for convenience only, are not guaranteed, and should not be relied upon. Rates vary with no advance warning. You should consult an attorney, accountant, financial planner, housing counselor, mortgage lender, and/or real estate agent, as applicable, for advice and rates regarding your individual situation. Comments and opinions found here are not necessarily those of Get-Your-Best-Mortgage-Rate.com.

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