Mortgage Modifications With HAMP

The Home Affordable Modification Program (HAMP) is one of the programs designed to help homeowners fight mortgage debt and avoid foreclosure. While the program did not live up to initial expectations, changes have been made recently to broaden the scope of assistance.

Tier 2

As of June 1, 2012, new changes have been made to the HAMP tier 2 mortgage modification program guidelines. The tier 2 program has lessened the restrictions on property eligibility standards and relaxed qualifications for homeowners as well.

Under the HAMP tier 2, up to 2 modifications are allowed; compared to the one in HAMP tier 1. This means that second mortgages may also qualify for a loan modification, instead of limiting to just the original mortgage loan.

The HAMP tier 2 also does not require the homeowners to be occupants of the property, nor does the property have to be the borrower’s primary residence. This means that rental and investment properties may also be eligible for modification in tier 2.

HAMP tier 2 offer up to a 1 year forbearance agreement for unemployed borrowers and increases the limits on the debt-to-income ratio for eligibility. Previously, borrowers had to have debt-to-income ratios less than 31%, which has been changed to a range between 25% and 42%.

For more information or information on how to apply visit:

http://www.makinghomeaffordable.gov/programs/lower-payments/Pages/hamp.aspx