If you don’t qualify for a HARP loan (Home Affordable Refinance Program) to refinance under President Obama’s Making Home Affordable plan (the details were released today; see more info on the HARP loan refinance plan), you might still have a chance to lower your monthly payments by doing a loan modification under the Making Home Affordable plan, which is called a HAMP (Home Affordable Modification Program).

This portion of the plan is aimed at people who are — or who soon will be — having a tough time paying their mortgage, but who would be able to afford their home if the interest rate on their mortgage was lowered.

Who qualifies for a HAMP?

This will only apply to the first mortgage on your primary residence. To qualify for a HAMP, you must:

  • Have originated your mortgage before Jan. 1, 2009.
  • Be an owner-occupant.
  • Have an unpaid balance that is equal to or less than $729,750 (for a single-family home).
  • Have trouble paying your mortgage due to financial hardship. That could be because you have had an increase in your mortgage payments, or because your income was reduced or you suffered a hardship (like medical problems) that increased your bills, or, you can show that you soon will be unable to make your payments. You will be required to enter an affidavit of financial hardship.
  • Your monthly mortgage payment must also be more than 31% of your gross (pre-tax) monthly income.

To seal the deal, you must successfully complete a three-month trial period at the modified rate. If you make all payments on time, you will keep this lower rate that will be fixed for five years.

I Owe Way More Than My Home is Worth? Am I Eligible for a HAMP?

Yes, how underwater you are (or aren’t) doesn’t matter for this program.

What if I am About to be Foreclosed On?

The foreclosure process will stop while you’re being considered for the program (or for any alternative foreclosure prevention option).

How Will This Help?

The aim is for your monthly payments (not including private mortgage insurance) to reach 31% of your pre-tax monthly income. The monthly payments are defined as payments on the principal, interest, taxes, insurance (not including mortgage insurance) and homeowners association/condo fees.

First, the lender will reduce the interest rate to no less than 2% on the loan so that the monthly payments are less than 38% of your monthly income. Then, the Treasury will match further reductions, dollar-for-dollar, with your lender, to bring the monthly payments down further, to 31% of your monthly income.

If you keep your payments on time after the modification, the government will pay up to $1,000 each year in the first five years toward reducing the principal on your mortgage.

After five years, the interest rate on the loan will start to increase by no more than 1% per year, but can’t go higher than what the market rate was (as determined by Freddie Mac) on the day  your loan was modified.

What Will it Cost?

Under the program, the borrower does not have to pay any charges or fees. Any fees are supposed to be paid by the company that holds the loan, and the servicer of the loan will pay for your credit report.

What’s in it for My Lender/Servicer?

The company that services your loan will get a an incentive fee of $500 for each HAMP modification they do. Once your lender modifies your loan, they’ll be paid a $1,500 incentive.

Is There a Deadline?

New borrowers will be accepted until Dec. 31, 2012.

How Do I Start?

Gather these required loan modification documents and call your mortgage servicer (the company you make payments to). Your servicer is not required to join the program, but the government hopes that the incentives, along with the fact that this could help millions avoid defaulting on their mortgage, will motivate them to participate.

You can find more detailed information at Also, go to Zillow Advice for discussions on HAMP loan modifications.

Additional resources:

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If you have a Web site or blog and want to add content, add this “Do You Qualify for a Loan Modification?” widget to your site. It’s free and a fun little quiz to keep your visitors engaged. Plus, you get free co-branding.

  • kopper

    I am FINALLY going into my “trial” period for Loan Mod thru CitiMortgage. I would recommend with rates being as low as they are if you’re able to refi do that instead of the LM. (Especially with Citi) I have been working on this since February — Citi drags their feet, you NEVER speak to the same person twice — no last names, only first (& make sure you get their employee ID#) and ALWAYS ask to speak to a Supervisor (I learned the hard way) Always different information and it’s contradicted from one call to the next.
    I tried to be pro-active (I was never late … never missed a payment)and get the LM set up when my wages were cut and benefits removed – no paid sick time – no paid holidays or vacation. I have large medical bills I’m dealing with as well.
    With all the screwing around and misleading information from Citi, I have gone through my savings, am unable to contribute to my 401 (maybe start up again next year) AND my ‘new’ mortgage is $4,700 MORE than what I owed! AND, AND, AND it will be for 465 months instead of 360 (and I can do the 360 comfortably)
    People TALK TO PROFESSIONALS – get 2nd opinions — talk to HUD — don’t believe everything the Mortgage companies tell you (Banks are Federally regulated and are more up front — mortgage companies are slimy) and DON’T BE BULLIED – even if you’re in your 11th hour!
    Understand the process does not happen over night. It takes several months, so have a Plan B.
    I wish you all the best and God bless your homes (and your sanity). I hope your situations improve.

  • davidson


  • benjamin mann

    im unemployed i spoke to someone loan modication but i dont any money to their retain their service because my unemployment has not post my account she want 1.000 to start

  • M

    We have been paying on a home we could easily afford at the time purchased. We had a very high credit score and never missed any payements on anything ever until my spouse lost employment with Microsoft (Outsourcing to make Microsoft more $$ and let long time loyal employees with wonderful reviews for years go). We could not afford the payments after the layoff and requested Modification back April of 2010 (day spouse lost job). It is 6 months later, we paid all payements (3500 mo) until our savings ran out between modifications and other bills. We are now 6 weeks behind and Bank Of America does nothing. We have been calling twice daily since application, been given chat line numbers to send our documents to, been sent forclosure letters, bank calls a half dozen times a day for payments and NOTHING on the modification. We COULD afford our place with a slight interset drop (I am a social worker for disabled people and make a modest income but enough to pay if the interest dropped 2 percent). We WANT to keep our home, have 100,000 we paid down, another 100,000 in upgrades we took out of savings and our house is underwater by 30,000. Bank Of America are liars to be frank, have no intention of helping people and simply wait until all your funds are exhausted and you can no longer keep up. Our home was financed at a 6 percent interest rate when we bought it and not an adjustable arm. We bought with plent of money down and more than enough income to pay for it until we paid it off. Due to Outsourcing we lost our primary income. All this money WE taxpayers have paid to Banking industry and they have no intention of helping us. We paid $45,000 a year in taxes for YEARS and now can’t get help. So much for our tax dollars working for us.

  • John S

    I can surely relate to this post. In our case, I lost a job a few years
    back, managed to keep up with payments for a few years by tapping
    savings, taking on various part time jobs, freelance work, etc., and
    sometimes getting behind on other bills. I applied for consideration
    for a home mortgage modification plan way back in April 2009. After
    sending and resending data and filling out multiple forms, I would
    continually be ignored til I complained, then would be asked to fill
    out the same forms again and again. Started with Countrywide, then with
    B of A. This spring I finally got to where they Fed-Ex’d what they
    referred to as final forms and requests for data (the same I’d sent a
    dozen times before) and I sent that all in prior to their June
    deadline. Haven’t heard a word since, although I call now and then to
    check. It’s a ploy, I think, to get people to just keep paying the full
    amount as long as they possibly can. I’d like to just forget B of A and
    a modification, and instead just refinance with someone else. But I
    think that once you apply for a modification, you are suddenly in that
    limbo that makes it difficult to qualify for a refinance. If I don’t
    hear something shortly, I will probably explore a refi. I figure that
    if I can keep up with payments at 6.25%, I can certainly continue to
    make payments at 4-5%.

  • Jackie in Kentucky

    Wow, I read all of the previous posts…My story being quite similar..I went thru a divorce in 2003 (yes that is a long time ago) at that time my credit score was a great 740 the economy was good I was able to work as much overtime as I desired finanically I was great (emotionally not so much)…the last year has taken its toll on me personally losing my father and grandmother to diabetes…
    I started my home modification in April of this year with Bank of America and I am still waiting I had (NEVER) missed a payment in 17 years and I have lived in my home for 18 years..its like the last 17 years didnt count for anything…The so called customer service reps that I have encountered need to take a class on how to treat a customer, I have never felt so belittled and made to feel like a complete loser in my whole life…Do these people look at the file and how long Ive been a customer no Im sure they dont or they just dont care..I did what other people have said they did I took a loan from my 401k to catch up and then they didnt want to talk to me anymore about a home mod because they are thinking I can afford my mortgage…I dont know what to do Im damned if I pay it on time no home mod Im damned if Im behind..(threats of foreclosure)…Help somebody please….I work 40 hours at my current job that I have been at for 13 years and I just recently got a second job (holiday job) to make some extra cash…I am so stressed about this I cant sleep, I feel like Im stuck Im sure my good credit is shot now, Im actually scared to check it now to see what it is..Im at the point of no return I want to stay in my home but like many people have said every month they keep tacking on more late fees and the past due amount is growing..I am sending in a payment but I am currently 2 months behind I dread calling every month because I have to hear someone ask me stupid questions like are you living in the home? Like no shit…Really its like they teach these people to be so uncaring and rude…Do they think we like being behind…I work my ass off every single day I have very few days off I am not a lazy uneducated person and someone posted some mean comments earlier all I can say to that person (Sarah) is I will pray for you, no mean comments Im not gonna stoop to your level….Furthermore on a brighter note…..
    I have been reading the book the Secret, and I am going to hang up a dream board soon it will have a picture of a paid for home on it, with no bills and a huge soft bed that I can easily fall asleep in…Thank you to anyone that reads this post, I know I rambled alot…lol but maybe the right person will see this and do something about this mess this is our future we are talking about, and what will it be like for our childrens future…Sleepless in Kentucky..Jackie ;-) jackie is dreaming at yahoo dot com Thanks….

  • Oswin Grant

    I agree, the hamp can help you if other mortgage loan modification programs can’t help.

  • Michelle

    The banks have insurance that pays the full amount of the loan upon foreclosure. They also write off the loss on taxes and then they are able to sell your house on top of it. Foreclosure is making banks a huge profit. In many cases twice or more than the original loan. Why would they help you??

  • Jim

    Hello Jackie and everyone else,
    Same story here to with Bank of America. I applied for the HMA this past February. Never heard anything from BAC until they sent me the FedEx package requiring all my financial paperwork. Sent it in. A month goes by and WOW, all my taxes are paid and insurance. Still have never heard anything on the modification. Now I get my statement and escrow is included, I never had escrow so I called BAC. They said it was a good sign and that I need escrow for the modification. This was Mayish or so. Also my mortgage payment went from $2533.00 to $4932.00 with the escrow. I explained that I could not afford this. That’s why I am requesting a modification! BAC says just pay the usual 2533.00. Now I am getting phone calls that I am three months behind in my loan and how am I going to pay. I just got my 2nd letter of intent to accelerate. I called BAC to explain the situation regarding my HMA but I guess one dept. is not talking to the other. How am I supposed to pay $4932.00 if I had trouble paying $2533.00? BAC stated to pay that amount until the home modification goes through, but they always say it is not guaranteed. Now I pulled my credit report and after being good on the home loan for a year now it shows I am passed due by +120 days. After a month of this I called The state of Connecticut, Dept. of Banking to file a complaint. They forward this complaint to BAC and now when I call BAC I am forwarded to the Office of the President. I am now in touch with James Partridge, Customer Advocate. He assigned me a negotiator. I spoke to the negotiator and he can’t understand why Mr. Partridge assigned me to him since my loan is not four months past due and that he really can’t help me. He did state that my modification is in the works but can’t tell me who is working on it, how much time until I get a decision, etc. I just got a really nice sympathetic letter from The office of the president (BAC) and they said that, of course, there is no record of anyone saying to pay the original loan amount of $2533 and that I must pay the $4932 until I get a decision that has been taking 3/4 of a year! I am going to pay my “notice of intent” due December 16th of $6032.66 but as I told BAC and everyone, I thought the escrow was rolled into the modification. What a mess!!! Before all this I was up to date on my loan payments, taxes and insurance and now I have to deal with this, just before Christmas.

  • Pingback: HAMP Loan Modification Program Description | Loan Modification USA


    To: SA on March 10, 2009 11:54 am

    My annual income is $110k/year and my monthly mortgage payment is $2900 (including escrow). I pay my credit card bill infull each month and there is no other loan. Would I qualify for this new program. Thansk

    NO YOU DO NOT QUALIFY- 31% DO THE MATH – FOR SOMEONE WHO’S LUCKY(BLESSED) ENOUGH TO BE WORKING AND MAKING A GREAT INCOME THE PROGRAM WAS NOT DESIGNED FOR GREEDY PEOPLE LIKE YOU -CRY US A RIVER. TRY MAKING A $1,100 PAYMENT on a house you lived in for 12 years WHILE ON UNEMPLOYMENT oF $387/week with a FAMILY of 4or 5. ANd others even have it worse as their unemployment is running out, After having steady job(s) for years and many have BS, Masters,and so on.

  • Pingback: Home Affordable Modification Plan – Checklist For Approval » Article Campus

  • ModificationProcessor

    One could always file bankruptcy and have the second lien stripped, if you have a good attorney that is.

    Rules for Modification:
    For example, have you had a significant increase in your mortgage payment OR reduction in your income since you got your current loan OR have you suffered a hardship that has increased your expenses (like medical bills, childs karate classes increased and now he needs music lessons.) Don’t forget the the private school costs and the family cell phone bill. Then there is your cable, internet, and three car payments. And when spring comes you must pay to have your lawn cut. Add in the costs for clothes, boyscouts, movie tickets, and three children with braces. Bingo! You meet the criteria. And all of this is after you took out a second mortgage to buy more property or open a business or used it to pay off sixty thousand in student loans or credit cards. Poor dears, you don’t have to turn off the cable or your cell. Americans must be kidding. Even though you wasted money and borrowed until you could not borrow any more that is okay. Call your mortgage company today and tell them you want the Obama Plan. They know, the one which has the loophole where you can spend all of your money on cable and cell phones and then since gas is too high for your Travel Home or your busiess failed which opened with borrowed money, here by all means let us reduce your mortgage. It goes like this. You will have a better rate than anyone could possibly buy. The rate given only to people with the poorest of credit scores. Here it is: Year 1-2 will be 2%, then Year 3-4 will be 3% and then on year 5 we change the rate to 4% and get it at 4% until it is paid.

    What? You are wondering about the 45k past due because you have not paid a mortgage payment in 26 months. No problem! We will put that to the end of your note or extend it out farther for you. Will that help you?

    Now, don’t feel like you should not ask for this. The pitiful people who are going to work everyday suffering through these conversations are the one’s who had parents which told them not to beg, to be responsible and pay their bills.

    WAKE UP ! Get on the phone, you don’t even have to be late with your payments to ask for a modification. Well, even if you are required to be one payment behind, that won’t damage you. Be late get that 4% that only people with horrid credit can have.

    PICK UP THE PHONE and call your mortgage company. Tell them you want the Obama (don’t pay your bills) plan. Ask for a modification hat else can you do when you feel like you may have to cut back and turn off your cable tv service. Call today and help keep those clerks in jobs!

  • Michelle

    Nice for you bankers and greedy wallstreet miguls for you to blame the middle class taxpayers for living large on unemployment. Before we give up cable t. You pork barrels need to give up tour yaghts, mansions, fat salaries and billion dollar bonuses on the backs of taxpayers. Fat slobs rob the taxpayers then blame them fir having the nerve to work60 hours a week and afford cable tv. Shame on you fat cat politicians, bankers and wealthy repkublicans who skate out of paying taxes!!!

  • Michelle

    Mr. Mortgage processor, why don’t you give up the fat bonuses we the people are paying for, luxury cars, luxurious trips and exotic vacations and think about how you and your wallstreet bedmates and your greed is bringing down our great Country. I would like to know when you fat cat pork barrelers have to give up any one if the things I mentioned. I DO NOT think the cable tv and Verizon bill is the problem here!!! You must be a Bank Of America CSO.

  • Michelle

    I would like to know when those of us working like dogs having lost our living wage jobs to outsourcing so Microsft could save money. money. Did you fat cat bank and politicians get a kickback from the big companies who have old their souls to send our jobs and economy overseas. What about China making zilliins of dollars sendi g their trade goods to the US while we only send out 1% of trade to them (check out what Mr. Trump says on this)? We have big problems here to do with you 1% at the top of the food chain. What balls you greedy bankers, politicians and walllstreet rip offs have to accuse we “digs” of living large with our cable tv. I want to know when you crooks give up something!!! I bet if you stopped outsourcing our jobs we would all be able to make our mortgages. You piporkbarrelers and kickbackers need a wake up call.

  • Michelle

    “Making Home Affordable” is a smokescreen to placate we Stupid workers who list our jobs to outsourcing to think the government is going to help us. What a joke! Why don’t you bring our jobs back from overseas so we can make our mortgages??!! Few have been helped with this joke of a smoke and mirrors diversion. We DO NOT want charity but to be Americans and be able to work so we can pat our own way. Do we ha e to move to I.dia to get a job that pas a living wage?!! Why does big business, , rich people and politicians get the fat off the land, enormous profits from outsourcing while we Americans struggle to pay a $50 cable bill??!! When do our jobs come back??!! Sell your wonderful Country, Land of Opportunity fir bigger profits. Who will support you fat cats she. All our jobs are overseas?? I don’t thi.k India, China or the other Countries who now have our jobs will send you greedy bankers, wallstreet crooks or politicians taxes to support your luxerioys lifestyles! Doesn’t take a rocket scientist to see that we the people ca t support your lifestyles if we have no jobs to pay taxes.

  • Michelle

    I for one think we need real change not just lies ad broken promises! We want our outsourced jobs back, change in the way the greedy 1% of the foodchain handle our economy and supporting every Country in the world but our own. I like what Donald Trump said about China making off with the treasury with their crooked trading. We need REAL change not smoke and mirrors. HAMP, what a joke. What we want is out dignity back, our jobs back from outsourcing. We don’t wan charity but to be able to afford to live. So Mr. Wallstreeter, Mr. Banker and MrMr politician, let’s cut basic programs that feed out elderly so they are not eati g catfood and outsource a few more jobs so your ri h company bedmates can give you kickbacks for outsoyrcinv.

  • Michelle

    We want to work and pay our own way, dont want charity or giverment handouts but to be able to earn a living wage. Stop outsourcing jobs and perhaps people could afford to make their mortgage payments. You greedy 1% are selling out the USA tii line your greedy pockets. Let’s get our citizens back our jobs. When do the rich start to make sacrifices.

  • Rich

    Great article, thank you for posting it. It is extremely difficult to work with the banks directly in order to get a home loan modification. I would suggest hiring a reputable company or law firm to help.

  • John Soennichsen

    The suggestion to hire an attorney doesn’t appear to acknowledge the fact that if a party has sufficient funds to pay an attorney, he or she would probably still be paying his or her house payments in time. I have been waiting for almost two years to get some sort of action by B of A, after having supplied them at least ten times with all the financial salary, personal life story stuff they have wanted, all to no avail. Believe it or not, I have managed in those two years to be only about two payments late on a consistent basis, still paying them when I can and doing everything I can to bring in more money as I work with them (actually, I do the work, and they do nothing) on a modification. If I had a few thousand dollars to give an attorney, I’d make two house payments with it instead.

  • home loan comparison

    yes, we have to set a price deadline in our mind when we are in the auction of the house, if the house price over the budget, we have to stop raising our hands, otherwise, our life will be too hard after you get the house.

  • first home loan

    The amount of such loan is based on the projected value of the home and the amount needed to complete the work. You can also apply for these loans just to increase the value of your home after renovation.

  • glyconutrients

    Modifying your home is great, thanks for the plan.

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