HAMP Tier 2 Modifications Offer Hope

by Mart in Virginia, Jack in Mosinee, Susan in East Troy, Jack in Santa Ana

HAMP Tier 2 Modifications offer hope and second chances to struggling homeowners: Family illnesses? Loss of a primary job? Rising cost of living on a fixed income? Unrealistic mortgage modification payments? Low credit scores? The 2nd phase of Making Home Affordable Modification Program provides another chance to homeowners.



So don't give up on affordable monthly house payments. There's hope!

Question 1: Do I Qualify for HAMP Tier 2?

By Mart from Virginia

Kate, I was given a trial period for my HAMP. But I missed the second payment due to family finance and expenses. My brother passed away in same year, we had to go back home. Our mom got sick so we had to send me. That's why we missed the trial period.

Our house is in short sale now. Can we still stop the short sale and apply for HAMP 2? Thank you.

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

Ask Kate answers: Do I Qualify for HAMP Tier 2

Hi Mart,

I'm so sorry to hear of your family's loss and hope your mother is feeling better.

Only your loan servicer can determine with certainty if you are qualified for a HAMP loan modification of your first mortgage.

So it is vital that you get on the phone and tell your lender if you wish to stop the short sale. At the same time, you can request to modify your mortgage under HAMP Tier (Phase) 2.

You can also enlist the aid of your Realtor if you're having a difficult time contacting the loan servicer. Because real estate agents must coordinate with loan servicers during a short sale, your agent may be able cut through the red tape and find someone to help you.

Ask Kate for HAMP Tier 2 loan modification help
But first, read about the New HAMP Tier 2 Mortgage Modification News that brings hope to homeowners who lost good standing with their permanent mortgage modifications or did not successfully complete the trial period.

Then start the process of getting your lender on the phone to stop the short sale and initiate the loan modification process. If you find you're being put on hold or transferred to voice mail, you can also make the phone call during non-prime hours.

Best wishes,

Ask Kate

Question 2: Can I Stop Foreclosure and Get HAMP Modification?

By Jack from Mosinee, Wisconsin

Kate, I already had a HAMP modification. I paid the trial payments. I could afford them but the final modification payments were too much. They said take it or leave it. I took it but couldn't make payment because they raised it 1/3 of the trial payment.

I already filed chapter 7 and applied for another modification but am getting the run around. Can I get another HAMP modification? Or what is my best option? HAFA? Who can help? I think I know more about modifications then lawyers. Thanks.

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

Ask Kate answers: Can I Stop Foreclosure and Get HAMP Modification

Hi Jack,

I find it shameful that a bank would significantly increase your permanent mortgage payments after a trial loan modification period with affordable payments.

A take-it-or-leave-it attitude speaks, "We have you over a barrel, don't we?" Disgraceful.

So here are some options. Follow the links I left for the other 3 homeowners to read more about HAMP Tier 2, a second chance for many homeowners.

But in addition, there are options provided called HAFA, Making Home Affordable Foreclosure Alternatives. They are designed to avoid mortgage loan foreclosure by transitioning out of your home with $3,000 for moving expenses.

That removes at least a little of the sting, doesn't it?

Go here for more details: Strategic Default vs HAFA Deed in Lieu, Deed for Lease, Short Sale Foreclosure Alternatives.

Best wishes,

Ask Kate

Question 3: Making Homes Affordable?

By Susan S. from East Troy, Wisconsin

Kate, We got a Making Home Affordable Modification about 2 years ago. Was that HARP? And how can I find out?

We are over 31% of our income and under water about 45,000.

House payment $1185.00 plus $125 condo fees. Income is $2200 from Pension and social security. We get $650 from a rental, a home we cannot sell in Florida.

We are elderly and have no bills. But we have put off dental and medical things we need. Our 2 cars are 10 and 15 years old. Not sure how much longer they will last? Rather concerned with the payment the way it is to make any bills.

Wondering so we would know if we are eligible for HARP. We are current on the mortgage. Thank you.

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

Ask Kate answers: Making Homes Affordable

Hi Susan,

HARP is a home loan refinance program and HAMP is a plan that modifies your existing mortgage.

While this may seem like splitting hairs since both come from Making Home Affordable, an official program of the United States Treasury Department and HUD, Housing and Urban Development, they are 2 distinctly different animals.

So if you modified your mortgage 2 years ago, that could have been under the Making Home Affordable umbrella. But it was not a HARP refinance! More on this in a moment.

You can contact any participating lender to see if you qualify for HARP. But HAMP is only accessible though your lender or loan servicer, the company to whom you pay your mortgage installments.

Back to the difference between HARP and HAMP, as promised! Go here to learn about HARP 2.0 refinancing benefits and guidelines, and a comparison of the 2 programs at Is HARP 2 or HAMP Best.

Best wishes,

Ask Kate

Question 4: Where Can I Find a Refinancing Loan?

By Jack from Santa Ana, California

Kate, We have a first mortgage of $650,000 and a second mortgage at $100,000. Our house is worth an estimated $830,000.

We have an interest only loan at 5.75% with Flagstar. Our loan is neither Freddie Mac nor Fannie Mae. Flagstar has no loan program for us.

We are trying to refinance our house to get a conventional 30 year mortgage and try to lower our monthly payments. Our credit is in the high 500's. Is there any program for us?

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

Ask Kate answers: Where Can I Find a Refinancing Loan

Hi Jack,

Have you asked Flagstar about a Making Home Affordable Modification Program? Your first mortgage does not need to be owned by Freddie Mac nor Fannie Mae in order to qualify.

Initial eligibility for HAMP Tier 2 includes the following criteria:
  • You obtained your first mortgage on or before January 1, 2009.

  • You owe less than $729,751.

  • Maximum loan amounts for multiplex rentals are as follows: $934,200 - 2 units, $1,129,250 - 3 units, $1,403,400 - 4 units.

  • You need to be able to demonstrate a financial hardship.

  • You are in danger of not being able to make the monthly mortgage payment or are delinquent.

  • You have enough income to qualify.
After a modification closes, many homeowners are offered a chance to modify the second mortgage although I do not know if Flagstar is a participant in the Making Home Affordable Second Lien Modification Program (2MP).

If Flagstar participates in neither Making Home Affordable programs, ask them how you can directly negotiate modifications of your existing loans with them. Find help for this at Is Mortgage Modification Easy.

Best wishes,

Ask Kate

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Modification for Unemployed Homeowner
by: Cori

I have been trying to modify an underwater 4plex rental property in CA with Chase for 3 years now. My current rate is 3.5%, 40 year term.

They told me recently a few weeks ago (when they denied my modification again) that the HAMP Tier 2 plan would not work because it would raise my payments from $3090 to $4098.

This is because the principal forgiveness of $166K (which still leaves me underwater) would require them to raise my rate to 5.125% in order to reduce the principal.

I haven't read anywhere that they have to raise your rate in order to get principal reduction. Is there?

To further compound my issue, my husband just lost his job Wed. so I am curious if we would qualify for the HAMP Tier 2 Unemployment Program with one of us unemployed. He made the most money between the 2 of us. Any advise, I would appreciate it. Thanks.

Hi Cori, Kate here...

Hmmm... I'm suspicious too. Here's how to verify that you are getting the truth when the lender says principal reductions have to raise interest rates - Check it out with one of the Making Home Affordable counselors.

Go to Free Making Home Affordable Housing Counselors Escalate Help for contact information and also to see how the housing experts can help you with loan servicer issues during the modification process.

Secondly... Yes! Apply for UP, Making Home Affordable's Unemployment Program. You can read the eligibility criteria at Alternatives to HARP 2 Refinance Roadblocks. See the following comment below also.

If your loan servicer participates but gives you the runaround, talk with one of the housing experts about this too.

Best wishes, Kate

HAMP Tier 2 and Forbearance Assistance to Unemployed
by: Homeowner in Florida

Kate, would HAMP tier 2 modification benefit us?

We are under a tier 1 modification for over a year. My husband is still unemployed and his unemployment has ran out.

Our interest rate is 2% and the loan has already been extended. Our lender does not participate in the principal reduction portion of HAMP.

Will we eventually be required to catch up past due payments under the tier 2 forbearance assistance to the unemployed?

Hi Kate here.

Contact your loan servicer to ask for an extension of the Home Affordable Unemployment Program. Note the last two words - "or more" - of the following quote.

"If you are unemployed and depending on your situation, MHA's Home Affordable Unemployment Program (UP) may reduce your mortgage payments to 31 percent of your income or suspend them altogether for 12 months or more." - Making Home Affordable.gov

Because not all homeowners are offered identical terms, I don't know if you are expected to pay back the forbearance assistance. But in general, forbearance implies a temporary agreement to reduce or postpone, not forgive.

It's a great question. I hope you'll ask the loan servicer and return to add the response in a comment. Other homeowners will be appreciative, I'm sure.

Because Florida is included in Hardest Hit Housing Markets (HHF), ask if you are eligible for any assistance from this fund.

You can also read more about HAMP tier 2 qualifications at HAMP 2 Modification News.

Best wishes, Kate

P.S. It is frustrating to be stuck with a loan servicer who doesn't participate in HAMP with its related programs, or as with your lender, only partially participates. But I should mention that lender participation is voluntary.

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The information you obtain at this site is not, nor is it intended to be, a substitute for financial, real estate or legal advice. You should consult an attorney, accountant, lender or real estate agent, as applicable, for advice regarding your individual situation. Comments and opinions found here are not necessarily those of Get-Your-Best-Mortgage-Rate.com

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