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Understanding the HAMP loan modification guidelines implies on how a person submits his income and expenses. If a person spends his money unwisely in groceries or some other bills than he can even get denied for loan modification. Thus managing the expense and income in the right manner is the key to approve for loan modification. There are few secrets to follow for approving of the HAMP plan. Usloanz can also help people to get approve for their loan modification. They have helped many people to get their approval for permanent loan modification.

Income to debt ratio: The main thing to understand here is the 31%. According to the home affordable modification program guidelines, the lender has to reduce the mortgage payments to 31% of the gross monthly income. If the income to debt ratio is below 31% then nothing can be done and HAMP would not be an option to consider. If a person comes above 32% than he can still review HAMP and know more details.

Excess monthly cashflow: This is an easy and simple calculation of the monthly income subtracting the monthly expenses. The end result would either be extra or a shortage. According to the rule of a loan modification attorney or any expert the extra or shortage should not exceed 10% of the monthly gross income of the debtor. Thus one should assure that his excess monthly cashflow shows that he can easily manage a mortgage payment of 31% of the total gross income. The lender can’t lower the payments until and unless the debtor shows their paying ability.

Net present value test: This test is usually an approval test and it is used to decide as how a HAMP affect the lenders net income. This test calculates many factors like the value of the home, re-default rate and many other to decide whether its worth to apply for a loan modification or not. If the loan fails the NVP test then the lender will consider other in house options for the debtor. Some times in few cases by adjusting the income and expense one can pass the NVP test.

There are many guidelines which decide whether a person would be eligible for HAMP loan modification or not. Loan modification advice can be taken from an attorney and one can even improve his case. One can normally make adjustments or changes to his monthly budget for presenting his case in a better manner to the lender. One just needs determination and tolerance and that will allow them to stay in their homes by avoiding foreclosure.