The Home Affordable Modification Program was designed to help homeowners with financial hardship avoid foreclosure through loan modifications. However, many people have not been able to take advantage of the program due to strict lending standards. In order to reach more consumers dealing with mortgage debt, the government is extending the program and relaxing some of the qualification requirements.
Prior to the June 1, 2012 extension of the HAMP, homeowners with mortgage payments less than 31% of the gross monthly income were ineligible for a loan modification through HAMP. That restriction has since been lifted and even mortgage holders with a monthly mortgage payment less than the 31 percent may be eligible for help through HAMP.
Additionally, homeowners of rental or investment properties may now apply for HAMP assistance on mortgages for such homes. Second mortgages may also now be included in the modification program.
Some of the basic requirements remain intact, such as having a mortgage origination date of a January 1, 2009 or prior, capping the mortgage principal balance to $729,750 on a single residential property and having missed one or more payments due to financial hardship. All HAMP applicants are required to provide documentation to demonstrate their income is sufficient to maintain the proposed modified mortgage payment.