June 1st, 2012 10:05 AM by Steve Iltis
Home Affordable Modification Program Option
If this sounds like your situation, you’re not alone. Many homeowners are struggling to make their mortgage payments in this tough economy. To assist you, the federal government has created the Home Affordable Modification Program (HAMP)  to help borrowers make their payments more affordable.
What is HAMP?
HAMP is designed specifically to help homeowners impacted by financial hardship. With HAMP, your loan is modified to make your monthly mortgage payment no more than 31% of your gross (pre-tax) monthly income. If eligible, the modification permanently changes the original terms of your mortgage.
A modification may be an option if:
· You are ineligible to refinance
· You are facing a long-term hardship
· You are behind on your mortgage payments or likely to fall behind soon
· Your loan was originated on or before January 1, 2009
· Your loan is owned by Fannie Mae  or Freddie Mac  –or is serviced by a participating mortgage company —if you’re not sure, click the links to check
For complete details on HAMP eligibility and requirements, go to makinghomeaffordable.gov .
What are the benefits?
· Resolve your delinquency status with your mortgage company immediately
· May reduce your monthly mortgage payments to a more affordable amount
· Change the original terms of your mortgage permanently, giving you a new start
· Less damaging to your credit score  than a foreclosure 
· Stay in your home and avoid foreclosure
How does it work?
HAMP involves one or more of the following:
· Changing the mortgage loan type (e.g., changing an Adjustable Rate Mortgage to a Fixed-Rate Mortgage)
· Extending the term of the mortgage (e.g., from a 30-year term to a 40-year term)
· Reducing the interest rate either temporarily or permanently
· Adding any past-due amounts, such as interest and escrow, to the unpaid principal balance, which is then re-amortized over a new term
Gather your financial information—Make sure you have your basic financial and loan information on hand when you call your mortgage company. You’ll need:
Explain your current situation—Be ready to outline your current hardship and explain why you are having trouble making your mortgage payment and if this is a short-term or long-term problem. Your mortgage company will need to understand the reasons why you are having difficulty in order to find the right solution for you.
Contact your mortgage company —Tell them you are interested in a Modification and you want to see if you qualify for HAMP.
Published on Fannie Mae (http://www.knowyouroptions.com)