HAMP Denial? Tips on Getting an Affordable Modification

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Designed by the administration of President Obama, this program was meant to help approximately three to four million homeowners who were in need of reconstructing their mortgages. Reducing interest rates and thus reducing monthly payments would allow these residents to stay in their homes, reduce the fear of future foreclosures, and just generally improve their financial standings.

Not For Everybody

Unfortunately, even if a homeowner is facing serious financial difficulties, not all will qualify for the program. You see, the home must be worth less than $729,750. The mortgage financing the home would have had to be obtained before January 1, 2009. Also, the borrower must be the primary occupant of the property.

Many Qualifiers

On top of all that, the borrower would have to show that 32% to 70% of his or her entire pre-tax income had to be allocated to the monthly payment on the loan. And the list goes on: the homeowner would have to prove that once all the household bills are paid, there must not be a deficit that comes to more than ten percent of the monthly household income. If all these hurdles could not be jumped, the homeowner would be denied HAMP.

Three Considerations for Reversal

In spite of not being to clear all these requirements, a homeowner does have some recourse to get a reversal. This is contingent on the circumstances outlined below.

Consideration One

Upon denial, the homeowner must determine the exact cause as to why they were denied. Sometimes this is something as silly a missing document or an improper address or box checked. Sometimes it is just a miscalculation. Maybe the less than 32% of their salary before taxes was misconstrued or maybe an error in totting up expenses. It is very important to go over the application with a fine tooth comb and fix any expenses or income misappropriation. Fixing these discrepancies and then reapplying has been successful for many.

Consideration Two

Perhaps a homeowner was denied because of insufficient income. If this is the case, there is the possibility that the applicant could come up with an additional sort of income, such as a part-time job, to cover the deficiency. You see, a lender really will not approve a HAMP if the property owner is likely to default. Why would they? Eliminating unnecessary expenses may be another way to qualify.

Consideration Three

No matter if the HAMP was denied, it is absolutely necessary that the homeowner continue to make payments on time according to the mortgage agreement. Sure the denial is a slap in the face, but things must be kept up. If an indication of default is filed against the homeowner, only about three months will be allowed to get the mortgage payments back on schedule.

Taking Their Time

Unfortunately, an application can take anywhere form a few weeks to a few months to be approved. Waiting and not making payments during that time may put the owner too far behind or too far along in the foreclosure process to get the modification. Not staying abreast of payments, or as current as possible, may render them ineligible for a HAMP.

Loan Modification Companies

If a homeowner does approach a firm to help them through the HAMP process, it is important the he or she finds one that is best suited to the particular challenges their application may present.

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