Currently the Making Home Affordable Modification is one of Many Modificaitons available for Home Owners facing a financial hardship.
The HAMP Program is intended specifically for:
1: Owner Occupied homeowners.
2: First Loans that are below $729,950
3: the loan was originated before 1/1/09
4: the payment must be more than 31% of your gross income. Even though you may have an interest only or negam payment you would look at the fully amortized payment. Principal interest taxes insurance and hoa if you have any.
this is your first hurdle.
Here is where it gets tricky:
If your more than 60 days late you should qualify if all of the above is true. Howeve the lender is going to run a Net present value. You need to have enough income to pay for the new modified payment.
the lender will do a water fall.
Which will include the following depending on the servicer:
1: recduce interest rate
depending on type of loan may only be to 3%if it is Fannie or Freddie. if that doesnt get your payment to 31% of your gross then they may extend your term to 40 years.
if that doesnt get your payment to 31% the lender MAY, if they participate eithe reduce or set aside some principal to get you to 31% of your gross income. this is not a requirement. also this depends on the value of your home. If your home is upside down the lender may consider it. the lender will run a NPV and consider where they will get more income, from a short sale, foreclosure or modificaiton. if they will get more from a modificaiton and they do not have to reduce they principal they most likely will offer a modification.
If the lender can get more money with a short sale than a mod they do not have to do a mod. this is in the Treasury Guidelines.
If you have been denied a modification you have the right to Demand a copy of"
1: your financials they used for the mod.
2: the net present value they used for the mod.
3; the value or comps, bpo used for the mod.
so the first criteria is only to get a prequal for a mod it is not an approval for a mod. Howere if you fit all of the pre qual and also your financial fit for the modified payment and the net present value, chances are better that you will get modied.
This is not legal advice, in no way am I suggesting that you will get a modification but I do suggest that if you get a denial from you lender that you send in a dispute right away and ask why. the Treasury has guidelines and an "Escallation Process for us to send in disputes" the lender has to have a way for us to go if we are not getting results and answers within 8 weeks. This does not mean a guaranted mod but guaranteed answers.
Best of Luck.
Joanna Jensen
Legal Assistant
Legal Realty
925 699 5041
Loan Modifications,
Debt Settlement
Short Refinance for Fha Current Loans
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