Home Loan Modifications

The Federal Government has put in place incentives for mortgage companies to modify home loan mortgages in order to allow more people to remain in their homes and avoid foreclosure. The latest program is titled “Home Affordable Modification Program (HAMP).” The HAMP program is the latest effort by the Federal Government to encourage “workouts” between homeowners and mortgage companies, especially mortgage companies and firms who received money under the Troubled Asset Relief Program (TARP). Just recently, the United States Treasury Department issued regulations which forbid some companies from denying a loan modification application because the debtor is in bankruptcy. Bankruptcy can now assist debtors in obtaining a loan modification through the Chapter 13 program.

Under the HAMP program, we can attempt to lower your mortgage payment to 31% of your gross income for the first five years. If your mortgage payment is already less than 31% of the mortgagee’s gross income, then you may not benefit from this program. When we refer to the 31% of the mortgagee’s gross income, we are referring to any and all persons who signed the note including both spouses if applicable. Therefore, if a married couple are on a mortgage, the 31% would be applied against both spouse’s combined income.

The HAMP program is a very powerful tool to assist you in retaining your home. We can cram down your interest rate to 2% for the first five years and increase it to a cap of around 5% based on the current federal mortgage rates. We can also spread your mortgage payment out over a 30 year period or even a 40 year period in order to lower your payments. In order to get this process started you need to set up a consultation with Mr. Fox as soon as possible. Right now we can do a HAMP consultation which may last up to an hour for $100.00. After that we can discuss the fees associated with the HAMP modification. This program can potentially save tens or hundreds of thousands of dollars over the life of the loan. Any fees associated with obtaining this loan modification can be paid through your Chapter 13 Bankruptcy Repayment Plan.