The Home Affordable Modification Program (HAMP) provided eligible borrowers with mortgage modifications. Because the program stopped taking applications as of December 31, 2016, if you default on HAMP you can’t reapply for the program. But read on to find out what kinds of modification options are still available for homeowners who're struggling to make their mortgage payments.
First, a little history: In 2009, the federal government introduced the Making Home Affordable program to help homeowners stay in their houses and avoid foreclosure. The main program under the Making Home Affordable initiative was HAMP, which modified loans to make them more affordable and sustainable for the long-term. HAMP used to be the largest mortgage loan modification program in the country.
Under the original HAMP program (HAMP Tier 1), the loan servicer used a modification waterfall, which was a series of successive steps, to lower a homeowner’s total monthly mortgage payment—including principal, interest, taxes, insurance, and association fees—to 31% of the verified monthly gross income for all borrowers on the mortgage. The modification had to result in a positive Net Present Value (NPV) for investors.
On June 1, 2012, the Obama administration expanded the original HAMP program by eliminating some of the previous qualification requirements. This meant that borrowers who were ineligible for regular HAMP (Tier 1) could quality for a loan modification under HAMP Tier 2. For example, borrowers could qualify for a HAMP Tier 2 modification for a home that was not their primary residence or if they defaulted on a previous HAMP modification.
Unfortunately, as of December 31, 2016, the HAMP program stopped taking applications.
While HAMP has ended, other modification programs, like the Fannie Mae and Freddie Mac Flex Modification Program, as well as proprietary (in-house) modification programs, now exist to help struggling homeowners modify their loans. Many of these modification programs are based on the HAMP model.
If you’re struggling with your mortgage payments, contact your mortgage servicer or a HUD-approved housing counselor as soon as possible. Other programs might be available to help you avoid a foreclosure.