December of 2016 marked the end of the Home Affordable Modification Program (HAMP), as well as most offerings of new assistance under the federal Making Homes Affordable program (though HARP will not expire until December of 2018). However, while federal assistance my no longer be available to you, many of the eligibility standards set forth by HAMP are still in force for many loan modification service agents. Here is more good news: Approval and decline decisions will likely be considerably faster than they were for HAMP applications, and the documentation gathering process is considerably less complex for many service providers. HAMP modifications may be at an end, but your loan modification process may actually be easier than ever!
Loan modifications: What you need to know.
Loan modification standards vary across providers. However, because many programs adhere to qualifiers similar to HAMP criteria, here are a few details that will be required.- The appropriate application form. The required forms for home loan modification differ depending upon your lender. If you have a Freddie Mac loan, you will be required to submit a different set of forms than you would for Fannie Mae, or other lenders.
- Documentation of hardship. You must be able to prove your inability to meet your payment obligation due to extenuating circumstances, such as a major medical event, a loss of employment, the death of a spouse, a disability, or divorce/separation. This may be documented in a hardship letter, and by providing outstanding bills and payment stubs. It is very important that all of the information is factual and verifiable.
- Delinquency of approximately 60 days or threat of imminent default. The foreclosure process does not necessarily slow or cease during a home loan modification. It is very important that you begin researching your options once you recognize the extent of your financial hardship. If your home is already being foreclosed when you begin your loan modification process, it is possible that your home will be put up for auction by the time you receive your approval or denial.
