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HAMP Loan Modification

Mark Cappel
UpdatedJan 27, 2010
Key Takeaways:
  • Understand HAMP's qualification rules.
  • Early HAMP results are mixed at best.
  • Learn more about HAMP's initial results.

My home mortgage is under water. What is Obama's HAMP loan modification program and what can it do for me?

I'm trying to understand the Home Affordable Modification Program and whether or not it is for us. I'm not clear if this is the right program for me. Our loan is an FHA loan and we are current on our payments. Unfortunately our house is underwater and we are struggling to keep up. What should we do to find out if this program is right for us? And we know that President Obama has endorsed this program, but can he really get the banks to help homeowners like us out? Thanks

The Home Affordable Refinance Program (HARP), which was initiated by President Barack Obama, is available to residents of their homes whose first mortgage is no more than 125 percent of the property's current market value. It is open to open to homeowners whose mortgage is guaranteed by Fannie Mae or Freddie Mac. Borrowers must be current on their mortgage, but at risk for foreclosure. To qualify a homeowner must also not owe more than $729,750 on a single-unit home, and their monthly mortgage payment must come to more than 31 percent of their gross income.

HARP is related to the HAMP program. The goal of HAMP was to get 500,000 risky loans under trial modification by November 1, 2009. Approximately 650,000 trial loan modifications went into effect by December of 2009. Mortgage lenders willing to modify loans receive incentives from the U.S. Treasury under HAMP as part of the Troubled Asset Relief Program (TARP).

HAMP loan modification results

To date, HAMP has already helped create more than 112,000 permanent loan modifications for borrowers who are facing foreclosure. Of those, 66,465 have been accepted by borrowers. Another 46,056 are waiting for signatures from homeowners. Overall, the program has produced more than 1.16 million trial-period plans. HAMP's goal is to help 3 million to 4 million people who may be facing a foreclosure and the program runs through 2012.

As of December 2009, 787,231 trial loan modifications are active through HAMP. During the fourth quarter, the number of active and permanent modifications increased 75 percent.

When the program was announced, its stated goal was to help between 3 million to 4 million homeowners decrease their mortgage payments, while also helping people avoid foreclosure.

To learn more about this program, see the article Is the HAMP Program Right for You? To get started with HAMP loan modification, go to the Home Affordable Refinance Program Web site or contact your creditor directly.

I hope this information helps you Find. Learn & Save.



BBill, Mar, 2010
I think that it's a great idea to look at bill consolidation at the same time that you are contemplating HAMP modification and mortgage solutions. See the resource How to Find Debt Relief to learn more. See also the Debt Coach tool to get non-nonsense, no-cost advice on your options for resolving your debt.
TTrinidad Villasenor, Feb, 2010
I need to know something about bill consolidation for the house. I'm making less money than I used to, they took 10 hrs off my job.
BBill, Jan, 2010
The HAMP program is designed to help people who want to stay in their home. It can assist two groups of homeowners: 1) those that have had recent hardships, such as job or income loss, medical issues or other life events and 2) homeowners with adjustable-rate mortgages, whose adjusted payments have increased to the point where they are no longer affordable. To see if you qualify, go to the HAMP program's Are You Eligible? Web page.
bbarack obama question, Jan, 2010
Will Obama's plan help people who want to stay in their home, but just cannot afford their home mortgage loan anymore?