HAMP Expands Mortgage Assistance With Help for Underwater Loans

August 08, 2010 | carol | Comments 0

The idea of “water” in the summer usually conjures up images waves pounding the beach, quiet days at the lake or sparkling blue swimming pools. This summer, the Home Affordable Modification Program has news for people who are not so fond of “water” terms at all – because their home mortgages are “underwater.”

If you owe more on your home than the home’s current value, the new HAMP program offers hope. It divides your mortgage into two parts – one for the amount of the current property value, and one for the difference. The second one is interest-free, and it’s forgiven over three years.

The Equifax Personal Finance Blog http://www.equifax.com/blog/ recently published an article about the new program. Written by Ilyce Glink, the article is entitled “Want a Principal Reduction Loan Modification? The New Home Affordable Modification Program (HAMP) Rules You’ll Have to Live By.”

To qualify, homeowners must owe more than 115 percent of the current value of their home, they must be in default on their mortgages (or are about to be), and their house payment must be more than 31 percent of their income. Loans acquired through FHA, Fannie Mae and Freddie Mac are not eligible for the HAMP program because those lenders will be announcing programs of their own later in the year. Some private banks are also introducing their own programs for people who don’t qualify for government-sponsored assistance.

If you think the program might help you, check out the details at the Equifax Personal Finance blog today and get started. One of the benefits of the new program: you should get your answer in 30 days. People used to have to wait months and go through a modification trial period. And if you don’t qualify for this program because you’ve lost your job, you’ll find information on the blog for a separate HAMP program designed just for you.

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