HAMP Stands for Home Affordable Modification Program. These are Loan Modifications provided for by a federal program that provides incentives to lenders and covers the loss associated with modifying a loan that the lender would otherwise have to absorb. For borrowers who are eligible for HAMP Loan Modifications, their monthly housing payment including principal, interest and taxes is intended to be reduced to 31% of  their monthly income.

HAMP was unveiled in March of 2009 but after two years, hasn’t come close to the stated goal of four million permanent home loan modifications. In fact, while over six hundred thousand permanent loan modifications have been given to troubled homeowners, almost nine hundred thousand more have lost their mortgage modification due to continued struggles in making the modified payments.

I see many people who have tried for months to get a HAMP Loan Modification. There are many reasons why borrowers don’t successfully get HAMP Loan Modifications. Sometimes the income of the borrowers is calculated so that their present PITI payment is already less than 31% of their income. Sometimes the remaining sixty-nine percent of their income is not enough to cover all other expenses thereby resulting in another reason why they do not get the HAMP Loan Modification.

Then there is simply constant delay. Many times, the lender does not review the HAMP Application in a timely manner. This often results in resubmitting application documents  repeatedly when, for example, the required 3 months of bank statements are always stale when the lender takes months to review the HAMP Application.

If you are facing loan default and may need Foreclosure Defense, it’s best to start the HAMP Application process early and stick to it keeping good records of all documents submitted and when.