The White House announced an expansion of the Home Affordable Modification Program (HAMP) on Friday. The details are still limited, but the expansion of this program is designed to help homeowners who are in need of foreclosure help, and possibly be allowed to stay in their homes. This will be done by offering servicers an incentive to forbear a portion of the principal balance of the principal balance over 115% of the current value of the property (LTV).
These changes will offer temporary mortgage relief to some unemployed homeowners. The qualified, unemployed homeowner/borrower who meets the criteria will have the opportunity to have their mortgage payments reduced to an affordable amount for 3 months-or maybe even 6 months in some circumstances –while they are looking for a job. If they do not find a job in the time frame, they will be evaluated for a permanent HAMP modification or they might be eligible for the alternative to foreclosure program.
The servicers/lenders will receive increased benefits under this expanded program to decrease the amount of foreclosure property in neighborhoods. As with any program, especially a government program, there are guidelines, and understanding them can be a daunting task.
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