Hamp and Non-Hamp Modifications

How do I get a loan modification?

2 Answers

You are asking a very difficult question.  First of all, if you are current on your mortgage, the servicer probably will not even talk to you.  Forget the fact that the HAMP regulations and directives require that they do so.  If you are willing to go into default, you will have a chance to make a deal, about 60 days in, at least as far as I have been able to observe. 

The economics of loan mods are quite complicated, so read up on it.  Start with www.nclc.org there is a great white paper on the subject by Dianne Thompson.  If you can understand half of it, you are well on your way. 

There are basically HAMP and non-HAMP modifications.  Start by sending in the HAMP package, which must be acknowledged in 10 days and answered in 30.  You can get this from the website; WWW.HMP-ADMIN.COM.  Look for Supplemental Directive 0907 and download the attachments.  Get ready for a roller coaster, but be patient.  These take months from start to finish.  At present interest rates are being adjusted down to as low as 2% but principal reductions are scarce as 'hen's teeth'.  Good luck, but remember, if you do get a workable HAMP mod, it will be on a 'take it or leave it' basis, and it can't be cured if you default on it later.  There are no second HAMPs at present.  Non-HAMP modifications are another matter and involve more flexibility and difficulty.  Beware of loan mod hucksters, find someone to help that you can visit if you must, and never send your hard earned dollars to a PO box in LA.

This is what you would call a loaded question. There is much mystery around this question and the answer is complex, many things factor into being able to qualify for this.

Some examples of how it differs are if you live in the home, or if it is a rental, or 2nd home.

Finding out who your investor is also matters, if it is owned by Fannie Mae or Freddie Mac and you live in the home you may be eligible for one of the goverment programs. To fid out if your home is owned by Fannie Mae or Freddie Mac you can check by going to www.makinghomesaffordable.gov

If you qualify by using the calculator they give you on the website the next step is to contact your lender and request a modification, this should get you transferred to the loss mitigation department, make you you take note of the direct line and also the fax number as you will need them both throughout your process.

 This is what you will have to do either way, if you qualify for the government program or not and there is a list of items you will need to prepare for the lender in order for them to review your file and assign you to a processor.

The list you need is as follows:

-H.A.M.- this is a hardship letter, you can get a free copy off the fannie mae website, it needs to be completed, signed and dated

-financial statement- this is a list of all items you spend money on monthly, your water, gas, cable, phone, groceries again as I said a list of ALL your expenses not just the ones that show on your credit report like it was when you got the loan in the first place. They want to see everything you having coming in and everything you have going out to see if they think they can keep you in your home. All income needs to be listed.

-copy of all bills, credit cards, bank statements and everything you listed on the statement as well as pay stubs or 3 months P and L if you are self employed.

Make sure you put the loan number on every sheet you fax as they have many files, many new people and paperwork is lost easily. 

It gets somewhat complicated on how they qualify you but it is similar to the way you qualify for a loan, they determine if they feel you are a valid or worthy risk based on the information you provide and they determine if they think you are capable of repayment.

Also a high number of these have defaulted again so it gets tougher to get approved for one as time progresses if you do not fall into the goverment program, also if you are not approved for the government program be sure to have them explain in detail the parameters of the modification so you understand what you now have.

There is much more to this but what I have listed here will give you a big head start prior to your first call to your lender.

Hopefully this will be of help to you. Good luck!