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The Federal home loan modification services have been designed to assist homeowners who have been struggling to stay current on their monthly mortgage commitments and thus, exposed to the risk of losing their homes. Nevertheless, if you are one of them and considering applying for the federal mortgage modification plan, here is some vital information which could guide you in getting a much better understanding of the government scheme and the benefits offered by it.

1. Trial home loan modification

If you are eligible for the government loan modification plan, you could be provided a trial loan modification. Typically, the trial phase runs into a period of 90 days and during that time borrowers are required to maintain regularity in paying the monthly mortgage installments. As per the rules and regulations which apply to the home affordable modification program (HAMP), neither investors nor mortgage servicers or borrowers would receive any payments from the government until the trial mortgage modification phase has been successfully completed. And on successful completion of the trial loan mod plan, the borrower would be provided a permanent loan modification through an agreement with the lender.

2. Determining monthly payments

In order to determine the borrower’s monthly mortgage payment, lenders need to take into account mortgage insurance fees inclusive of third party insurance as well as property taxes. In case they are unable to do so, it has to be done within 6 months of signing the loan modification agreement

3. Counseling requirements

One of the requirements of the HAMP mortgage modification program is that the lenders need to provide information to the borrowers in writing, who have DTI of 55% or more, on benefits as well as affordability of counseling services provided by credit counselors that have been approved by the HUD. In any case, HAMP modification plan would not be effective unless the borrower grants his consent for availing counseling requirements in writing.

4. Benefits offered by the HAMP

• If the modified home mortgage loan was found to be assumable prior to granting of loan modification, the Domestic Economical Modification is entitled to nullify it.
• The borrower is not required to pay any charges towards processing or closing costs.
• Modification charges which include notary fees, property evaluation appraisals and such other fees, if any, could be reimbursed by the Investor through normal procedure governing the investor as well as mortgage servicer.
• According to rules that apply to federal loan modification programs, unpaid late fees, before or when the trial phase is on, could qualify for a waiver.
• Cost for verification for credit report would be paid by the Investor.

To get more useful information on the HAMP loan modification program requirements and process, it is hereby recommended to utilize the professional services offered by reputed online service providers like USLoanz.