Over the past couple years many mortgage programs have came from Washington DC to try and help struggling homeowners with thier toxic loans. Programs were announced such as FHA Secure, Project Lifeline, Hope Now etc, but none of these were much help to struggling homeowners.

I wrote about all these failed programs in my blog post titled,  ”The Year of Foreclosure Prvention Flops.”

From Hope Now to the Hope Line. From Hope for Homeowners to No Homeowners Left Behind. From the FHA Secure to the FHA Modernization Act. From the Emergency Loan Modification ACT of 2007 to the Emergency Economic Stabilization Act of 2008.

Can we confuse Main Street anymore with these clever names and with no real help behind the names?

But things have changed since the beginning of the year when president Obama took office and announced the Making Homes Affordable program. This program will offer assistance to millions of homeowners, to help make their mortgages more affordable and also help to prevent the destructive impact of foreclosures on families, communities and the national economy.
 
In the Making Homes Affordable (MHA) program guidelines it clearly states that this program is to help modify loans that were originated on or before Jan.09. This program is to help homeowners on their primary residence whom which they have a first mortgage that does exceed the balance of $729,750 and to help them achieve a mortgage payment of no more then 31% of their gross monthly income(DTI).

 There are a few other factors that you will need to qualify for in able to be eligible for this program, so please check out the link provided above. You can also find other homeowners like yourself here on my forum at Loansafe that are currently going through the Making homes Affordable Program.This program is one of few that seems to actually be helping homeowners in this mortgage crisis.

Home Affordable Modifications

http://makinghomeaffordable.gov/borrower-faqs.html

1. 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.

2 . 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.

3. 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.

4. I have a junior lien mortgage. Am I still eligible?

Yes, but only the first lien mortgage is eligible for a modification under HAMP.

5. 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.

6.What will my servicer do to determine if I report a hardship?

If you report a hardship, your servicer will:

• Determine whether your loan meets the minimum eligibility criteria (i.e., owner- occupied; originated on or before January 1, 2009; and unpaid principal balance equal to or less the loan limit for the number of units involved).
• If your loan meets the minimum eligibility criteria, ask about current income, assets and expenses, as well as any specific hardship circumstances to determine if you are unable to make your mortgage payment. (Your servicer may initially accept verbal income and expense information. However, you will need to provide verifying documentation before a final modification is approved.)
• Determine if your monthly first lien mortgage payment is greater than 31 percent (approximately one-third) of your gross or pre-tax monthly income.
• Apply a value test to determine whether the value of the loan to the investor will be greater if the loan is modified (factoring in the government’s incentive payments). For example, loans held by borrowers who have a lot of equity or whose incomes are very low in relation to the value of their homes probably will not pass this value test. If the modified loan is not of greater value, the investor and servicer may still modify the loan. However, modification in such cases is not required.
• If the modified loan is of greater value, the servicer must offer you a modification under HAMP, and, if you accept the offer, will put you on a trial modification (typically three months) at the new payment level.
• If you successfully make all of the required trial payments during the trial period and the income and expense information you provided is determined to be accurate, your servicer will execute a permanent modification agreement.

NOTE:You will be required to sign the modification agreement and other documents and attest that all of the information you provided to your servicer was true and accurate. Misrepresenting any information required for the Home Affordable Modification is a violation of Federal law and has serious legal consequences.

Read more from ttp://makinghomeaffordable.gov/modification_eligibility.html

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