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“Struggling homeowners consider applying for HAMP home loan modification plans to drastically reduce their monthly mortgage burden and save their homes from foreclosures. Nevertheless, not many of them are successful in negotiating modified loan terms with their lenders. Therefore, prior to embarking upon the HAMP application process, it could be important for you to thoroughly understand the ins-and-outs- of the entire HAMP program.”

Most of the borrowers, who apply for the HAMP loan modification for the first time, hope to get their monthly mortgage payments lowered. Nevertheless, as per government statistics, during April hardly 25% of the applicants were successful in receiving a finalized agreement from their respective lenders. On the other hand, 30% homeowners were denied permanent loan modifications on account of either having missed a trial phase payment or having stated exaggerated income. Remember, in order to qualify for a permanent mortgage modification under HAMP, borrowers are required to strictly adhere to the home affordable modification program requirement. Thereby, if you are considering applying for a home loan modification through HAMP, it becomes essential for you to know the ins-and-outs of HAMP mortgage modifications.

1. The main purpose of loan modification

The primary objective of providing a home mortgage modification plan is to reduce potential losses that are otherwise going to be inflicted upon the lenders. When you are financially struggling and finding it hard to stay current on your monthly mortgage installments, your loan modification lender would review the extent of loss which could accrue out of your missed payments. Alternatively, the mortgage company is also entitled to receive incentives that are being provided by the federal government since; the HAMP is supported by a $ 75 billion stimulus package for helping financially strapped home makers.

2. The HAMP eligibility criteria
   • Homes for which mortgages are to modified need to primary residence.
   • Value of existing home mortgage cannot exceed $ 729,750 for a single unit family.
   • Current mortgage loan should have originated on or before 1st January, 2009.
   • Present mortgage payments need to be more than 31% of gross monthly income.
   • Borrowers must demonstrate the existence of a financial hardship situation.

To qualify for a loan modification plan under HAMP, borrowers need to satisfy below mentioned conditions.

There is no compulsion for lenders to approve every HAFA modification program guidelines applicant. This is because even if by granting you a loan modification, there no mitigation of losses, the lender has got every right to deny the request. And how does the lender decide this? Well, here comes the role of the “Loss Mitigation Department” which thoroughly scrutinizes whether you fall within the parameters outlined by the Obama stimulus plan guidelines. To ensure this, lenders pass on your HAMP application for review to the “Underwriter” who is the official authority to accept or deny your loan modification request.Thus, he is the most important person in the entire line of action.

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