Home Affordable Modification Plan: Home Affordable Modification Program Guidelines for Assistance

Hamp denials must be in writing and include the reasons why as of january 1, 2010 per the latest hamp home affordable modification program guidelines. I have evaluated the HAMP guidelines and this is what I have found regarding what their denial must contain:

Once you are evaluated for the home affordable modification plan and are not approved for the Trial Payment Plan, you must have a trial prior to being approved for the Permanent HAMP modification, your servicer is now required to advise both you and either Fannie Mae or Freddie Mac what the outcome is of your evaluation whether you are approved or not, for the trial plan or the permanent modification and if denied must provide you with the appropriate notice explaining the reason for the denial to be in compliance with the program rules.

Any notice other than of the Notice of Incomplete Information, must be mailed within10 business days after servicer’s disposition date notifying you that they are not approving you for either the Trial Plan or permanent Home Affordable Modification Program HAMP. The servicer must send you the notice via mail unless you have previously agreed to have it sent via email.

Keep this example in mind – let’s say your gross income is $1000 per month x 31% is $310 – (the original payment was $1000 per month, for example) and the homeowners insurance and taxes are $200 your lender is NOT going to give you a ONLY an allowable $110 MORTGAGE payment to arrive at the $310 max total modified payment because the maximum payment includes the homeowners insurance and taxes and HOA- it is important to be realize what the numbers are and work out your numbers. * This is key * As an example scenario if they were to say the loan failed NPV Net Present Value test: what that is in a nut shell is that according to a specific formula (NPV) it is more profitable to foreclose then to modify the loan. In the example I listed here if they were to let someone go down to a $160 per month payment then obviously foreclosing would be more profitable if lets say the home was worth 200,000 they would gain more profit selling the home after foreclosure then agreeing to take such a drastic payment reduction.

One token advantage the new legislation is that fluctuations in the interest rates will not affect their installment amounts. An interesting case is that of the Bank of America which sought financial rehabilitation from the government and got substantial help. Property developers who had their development and building work with financial loans from Bank of America stand to gain from this step. In acyclic manner this also helps the mortgages who are associated with these builders. To that extent the Bank of America loan modification has been helpful to at least to small percentage of people. The new legislation lacks in clarity with regard to tax liability of the people.

Learn more about Obama Mortgage Relief Plan Qualifications.