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In-House Vs. HAMP Loan Modifications: Some Basic Information

Florida homeowners have been inundated with the words "loan modification" for the last ten years. Some lenders often in-house loan modifications and, as a response to the mortgage crisis at the end of the last decade, the federal government offered government aid , including the most recent HAMP home loan modification program, to assist taxpayers. A loan modification amends one or more of the terms of your mortgage loan, such as the principal amount, interest rate, or length of the loan term.

An in-house loan modification is a proprietary loan modification through your lender rather than through a government program. It's sometimes called a "traditional" loan modification because the concept has existed since lenders first loaned money, which was long before the creation of HAMP.

Many lenders that offer or service mortgage loans have procedures for requesting and obtaining modification of home loans. If you're experiencing difficulty making current mortgage payments, contact your lender as soon as possible to discuss a loan modification or other loss mitigation alternatives. Most mortgage lenders use their loss-mitigation departments to process requests for loan modifications.

In-house modifications typically require a reasonable amount of information and thus necessitate a long trail of paperwork, which may be time-consuming and cumbersome. Many in-house modifications fail because applicants do not submit part of the information that is required.

Applicants for in-house modifications need to submit paystubs, a monthly budget sheet of income and expenses, a hardship letter, and any other required documents. Homeowners must ask questions, stay in constant contact with the lender, and first and foremost, be persistent. The attorneys at Loan Lawyers can help homeowners facilitate this process and alleviate much of the stress involved.

HAMP, as most people know, refers to the federal Home Affordable Modification Program, which was designed to lower monthly mortgage payments, and make them more affordable and sustainable for the long-term. The current application deadline for HAMP modifications is December 30, 2016. Basic eligibility requirements for HAMP are:

  • You are struggling to make your mortgage payments due to a financial hardship.
  • You are delinquent or in danger of falling behind on your mortgage.
  • You took out your mortgage on or before January 1, 2009.
  • Your property has not been condemned.
  • You owe up to $729,750 on your primary residence.

Nationwide Mortgage companies such as Bank of America, CitiMortgage, JPMorgan Chase, and Wells Fargo participate in MHA (Making Home Affordable) programs. Check here to see if your mortgage company is participating in an MHA program. Fannie Mae, Federal Housing Administration (FHA), Veterans Affairs (VA), and U.S. Department of Agriculture (USDA) also offer mortgage solutions for homeowners with mortgages that they own, insure, or guarantee.

At Loan Lawyers, our South Florida consumer rights and debt defense attorneys can help individuals determine their options regarding loan modifications. For a no-risk, no-cost consultation, contact one of our South Florida consumer defense attorneys today by calling (888) FIGHT-13 (344-4813).