The Obama administration’s most comprehensive attempt to resolve the foreclosure crisis is the Home Affordable Modification Program, or HAMP, which is available for mortgages owned by Fannie Mae and Freddie Mac, and for certain lenders who have volunteered to participate in the program. (Check out your lender on the web portal www.makinghomeaffordable.gov.) The program aims to reduce mortgage payments to an amount no more than 31% of the homeowner’s gross income. (It seems that the government and mortgage industry have finally concluded that it is necessary to reduce payments to realistically help people stay in their homes, a fact which has been perfectly obvious to the rest of us for some time.)
The program has the potential to help a lot of homeowner’s in trouble. The completed modifications I have seen are significant, and make a real difference. The problem is that too many people are waiting too long to find out whether they qualify, and are increasingly frustrated at the delays, and the repetitive requests for information. At a meeting this week, potential solutions discussed were standardizing forms (currently each lender creates their own), creating an online application process (currently most applications and supporting documentation are faxed), and hiring more people to process the applications.
HAMP modifications are available even if you are already in default, in foreclosure, even in Chapter 13 bankruptcy. Check out the Making Home Affordable website or call your lender to see if you are eligible. You will need persistence, patience and perseverence, but if you can’t afford your mortgage payments but want to stay in your home, it may be your best bet.