Red Edge
  • Home
  • Sell
  • How HAMP Can Help You-Short Sales

How HAMP Can Help You 

HAMP (Home Affordability Modification Program) program and is designed to give homeowners additional alternatives to foreclosure in the form of a Short Sale or Deed-In-Lieu of Foreclosure (DIL). This program ends on December 31, 2012.

The idea behind HAMP was to encourage lenders and homeowners to engage in loan modification, enabling homeowners to remain in their homes under affordable mortgage conditions and avoid foreclosure.

HAMP applies only to participating lenders. Click here for a list of participating HAMP lenders.

Am I eligible for HAMP?

You must first meet the following basic eligibility requirements under HAMP:
  • You are the owner / occupier of the property (up to four units). If the property has more than one unit, you must occupy one unit.
  • Unpaid principal balance equal to or less than $729,750 (The principal amount increases with multiple units).
  • Hold a first lien mortgage that originated before January 1, 2009.
  • Total monthly mortgage payment exceeds 31% of monthly gross income.
  • Mortgage delinquent or default reasonably foreseeable.
If you meet these initial eligibility requirements, you will then need to work with your lender to determine whether you qualify under your lender's guidelines.

Once application is made, what happens?

Upon receipt of your application, your lender will determine whether to modify the loan.

Assuming modification is an option, you'll be offered a modification program on a trial basis. If you accept the plan and are successful in the trial period, a permanent modification is arranged.

Examples of modification plans:

Reductions in interest rates to as low as 2 percent to achieve the 31 percent threshold. If this isn't viable, other options include, in order of priority:
  • Extension of payment terms to up to 40 years.
  • Forbearance: deferring a portion of the principal, interest free, until the maturity of the loan. At maturity (end of term, sale or refinance), a balloon payment would be required to pay the deferred principal.
  • Forgiveness of part of the principal.

If a HAMP loan modification is unsuccessful or unavailable to you, you still may be able to participate in HAFA.
Selling Your Home?

If you are considering selling a home in the Louisville area, contact us first to get a free valuation and market analysis.

Free Market Analysis
Our FREE service provides you with your home's current market value and suggested selling price.
Monday, November 7, 2022
Surprising but logical ways to put your mind at ease and go for the next step. by MIKE HALL Which path to take may not be as baffling as you think. To sell or to stay put? In ...
Read More
Thursday, October 6, 2022
Add another pumpkin experience to your fall lineup now through the end of October by MIKE HALL Kentucky Kingdom adds jack-o-lanterns and spooky decorations to delight theme park ...
Read More