If you got a mortgage modification through HAMP (the Home Affordable Modification Program), but your lender or loan servicer doesn't comply with the terms of the contract, you might have a defense to a foreclosure action. (To get tips on what to do—and what not do—if you're facing a foreclosure, read Foreclosure Do's and Don'ts.)
Read on to learn more about HAMP and how a failure to comply with the modification agreement might help you fend off a foreclosure.
The Home Affordable Modification Program (HAMP) was part of the government’s Making Home Affordable initiative. HAMP modified first-lien mortgages.
In most cases, HAMP provided borrowers with a lower monthly mortgage payment, with an the interest rate that starts to climb after five years—rising about 1% each year for several years. For example, immediately after modification the rate could be 2%, but eventually end up at 6%.
A HAMP modification is a contractual agreement between you and the lender. (The servicer handles your loan account on behalf of the lender.)
While the HAMP program stopped taking applications in December 2016, if you have a HAMP modification and your lender or servicer fails to act in accordance with the agreement, you might have a defense to the foreclosure.
For example, say you're sending the servicer payments in the amount you agreed to in the modification; however, the servicer claims you should be sending a different amount and improperly starts a foreclosure. You can challenge the foreclosure on the grounds that the servicer is violating the modification agreement.
If you want to learn about potential defenses to a foreclosure, including violations of HAMP, consider talking to a local foreclosure attorney who can advise you about what defenses are available in your particular situation and how to enforce your rights.
If you’re struggling with your mortgage payments and want to learn about loss mitigation options, or if you have questions about the terms of your modification, contact your servicer or talk to a HUD-approved housing counselor at 888-995-HOPE (4673) as soon as possible.