There’s been a lot of chatter about Obama’s administrations Making Home Affordable Program. This program announced in March of 2009 has two components to it: 1) the Home Affordable Refinance Program or HARP for short and 2) the Home Affordable Modification Program also known as the HAMP program.
The HARP program (Home Affordable Refinance Program) is designed for mortgages owned by Freddie Mac and Fannie Mae in which the homeowner can afford their monthly payments but is unable to refinance because they currently owe more than their home is worth. Under this program Fannie Mae and Freddie Mac will allow them to refinance up to 105% of the value of their home at today’s market interest rate. In order to qualify for this program you must have a satisfactory credit rating.
Regarding the HAMP program (Home Affordability Modification Program) – this program is designed to help people who are in foreclosure or going to be in foreclosure to keep their homes. This program is designed to assist people who have suffered some sort of financial hardship due to a reduction in income such as the loss of a job for your spouse or experienced an increase in the mortgage payment as in the case of an adjustable rate mortgage that adjusted up. The household must still have income however credit is not a factor.
Under the guidelines of the HAMP program your interest rate can be lowered to as low as 2% for up to 5 years, the bank may also extend the repayment term up to 40 years, and a portion of the principle balance of your loan may be placed on forbearance – A big word meaning its still hanging out there but you don’t have to pay interest on it for a certain period of time. If you sell your home – you’ll still have to pay that money back. All of these factors are designed to get your mortgage payment down to 31% of your gross household income.
For participating lenders in the HAMP program the Federal Government has sweetened the pot by giving them an incentive to modify an applicant’s loan. For each of the first 5 years of the modification the Feds will pay your lender a certain amount per month for accepting the modification. In addition, as a homeowner, if you make your new modified payment on time you may be eligible for $1,000 in principle reduction for every year you make your payments on time – up to 5 years.
You should consult your attorney or a reputable company that regularly deals in loan modification such as SureFast Loan Modification.com. These competent professionals can help to make sure you get the best deal possible and don’t get taken advantage of by your bank.
© 2009 Justin Richards – This article may be distributed freely as long as the authors signature information is included with the article.
In 1998 Mr. Richards graduated from University with a bachelor’s degree in Business Management and Finance. He founded a successful company that helped hundreds of homeowners to get on the path to financial freedom. He also over 7 years experience in the home mortgage industry. He loves helping people! Especially when it comes to helping them keep their homes and pay off their debts. Mr. Richards is happily married with four beautiful children. He is currently serving as a consultant for <a rel="nofollow" target="_blank" href="”SureFast”>http://www.SureFastLoanModification.com””>SureFast Loan Modification.com Please visit our blog at <a rel="nofollow" target="_blank" href="”All”>http://www.surefast.wordpress.com””>All About Loan Modifications
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