For the past seven years, the Home Affordable Modification Program (HAMP) has provided a potential option for homeowners who are struggling to keep up with their mortgage to avoid foreclosure and remain in their homes. The program allowed homeowners to apply for a government-facilitated modification of their mortgage loan to make payment terms more affordable so that homeowners could avoid default. As of December 31, 2016, the HAMP modification program came to an end, leaving many people wondering how it may affect them.
Seeking Proprietary Modifications
The end of HAMP does not mean the end of loan modification as a loss mitigation option instead of foreclosure. Borrowers can still seek modifications directly from their mortgage lenders or servicers. Some experts claim that HAMP ending may affect such proprietary modifications in the following ways:
- Shorter decision times – Homeowners who applied for modifications would generally first be screened to determine whether they qualified for HAMP modifications before their servicer evaluated their application for a proprietary modification. Now, that first step of HAMP screening will no longer be necessary and it is expected that this will speed up decisions on private modifications so homeowners can reap the benefits of a modification sooner.
- Less consistency – Because HAMP had such specific guidelines, many loan servicers tended to follow similar guidelines when making mortgage modification decisions. Now, however, without any specific guidelines to model after, people are concerned that there may be a wide discrepancy in modification approvals from one mortgage lender to another. This can result in widely inconsistent results for struggling homeowners and a lack of transparency in what it takes to get approved.
While consistency is a concern, several government agencies have spoken out and encouraged the mortgage industry to adopt and follow five principles when handling loan modification applications:
In addition, another government modification program – the Home Affordability Refinance Program (HARP) – has been extended for a good part of 2017 and the Federal Housing Finance Agency (FHFA) is reportedly designing a new refinance program to take over after HARP expires.
Call 201-498-9768 today for more information.
Knowing your options for a mortgage loan modification can be confusing, especially with the changes in governmental programs. If you need assistance with your mortgage and want to know your options, please contact an experienced New Jersey foreclosure attorney at the Law Office of John L. Schettino for help today.