Recently the Obama Administration introduced two loan modification programs known as the Federal Home Affordable Modification - HAMP Program and the Federal Home Affordable Refinancing - HARP Program. Both mortgage modification programs were launched in March 2009 and provide finance adjustment help for those homeowners who qualify. These two modification programs are designed to provide homeowners facing possible foreclosure an opportunity to keep their home.
What Is The HAMP Program?
The HAMP Program is a mortgage modification helping homeowners who have suffered financial hardship including loss of a job, death of a spouse or loss of household income. It is a loan alteration help to get their home mortgage modified without having to refinance.
HAMP Eligibility Requirements
o Must be living in your property when you apply:
o Have obtained your mortgage before January 1, 2009;
o Your mortgage balance is under $729,750 for a single family residence, $934,200 for a duplex, $1,129,250 for a triplex, and $1,403,400 for a 4 unit home;
o Your mortgage payment (including principal, interest, taxes, insurance, home owners association dues) must exceed 31% of your gross monthly pre-tax income;
o You can not afford your current mortgage payment due to a financial hardship that can be documented.
What Is The HARP Program?
The HARP Program is one of the loan modification programs intended to help those homeowners who want to refinance their mortgage but cannot because their homes value has decreased enough to prevent them from qualifying for normal Fannie Mae and Freddie Mac conventional lending loan to value guidelines. A loan changes with HARP may be the answer.
HARP Eligibility Requirements
o Your mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac. (See below to contact Fannie Mae or Freddie Mac);
o When applying for the HARP Program loan modification help you must be current on your mortgage payments. Current is defined as not more than 30 days late on your mortgage payment in the last 12 months. If you have had the mortgage for less than 12 months, then you cannot have missed a payment;
o Your mortgage balance cannot exceed 125% of your homes value;
o Your income is sufficient to pay back the new mortgage payment;
o Your mortgage loan modification must improve the long term stability and affordability of your current mortgage.
Example: your current mortgage is a 10 year Interest Only Mortgage and you are making a loan modification to a 30 year fixed rate mortgage.
Obama refinance plan has been primarily designed to make the financially grappling homeowners to pay their monthly mortgage payment successfully so that they may be able to avoid foreclosure. In case you are the home owner who is in the adjustable rate mortgage slab, not able to pay the monthly payments; home affordable refinance program (HARP) is for you. Millions of Americans as the result of financial crunch have not been consistent with their mortgage payments, and which is why federal government has come up with various programs, and HARP is one of them.
Most of the home improvement programs are quite effective in stopping the foreclosures and saving the home. Under the unique HARP program, mortgage lenders will refinance the existing home loan to a value equal to 138 percent of your home's actual value. By doing so, the mortgage lender will be getting fixed mortgage rate and there will be no fluctuations in the interest rates. Unlike the HAMP program, a homeowner who becomes eligible under the HARP, do not essentially have to occupy the property. It means that you can go for HARP even if your primary home is lying vacant. The program also has various other conditions which the homeowner can easily judge by reading through the program guidelines. If you don't understand then you can ask your mortgage lender as well.
The HARP program has become popular for many reasons and among the borrowers who have not been able to pay for the mortgage loan. The purpose of federal HARP program is to make the home affordable for the homeowner as he/she can easily repay the mortgage without any hassles. Most of the homes are on the brink of getting foreclosed, and in this context, HARP has brought hope for the homeowners. The ultimate purpose of HARP is to avoid foreclosure of the homes so that homeowners do not lose their home and they can stay peacefully in it. The program is one of many programs which have been started by Obama administration to help the homeowners in the manner where they get off the mortgage loans quickly and easily. If you are one of those homeowners who have not been able to repay the mortgage loan, then HARP is the right option to start with. HARP program to stop foreclosure is a smart program to make financially stricken US homeowners go free of their mortgage loans.
The Obama government understands that the home-owning people of the country are facing a crisis. Therefore, they are offering a mortgage help from government to one and all to overcome foreclosure blues. This would allow them to retain their homes and help them in their struggle to pay their loans. This government program is called Making Home Affordable. It aims at helping home owners modify their loan structure in a feasible manner to assure that they continue to possess their homes.
The recession had brought down many companies and had resulted in people losing their jobs. This had led to many home owners fearing that the homes that they have paid for so long would be foreclosed for non-payment of dues on time. This is where the Home Affordable Refinance Program (HARP) and Home Affordable Modification Program (HAMP) come into effect. These programs are basically mortgage help to the home owners to modify and refinance their loan in a manner to make it more affordable. These mortgage help from government programs are described here.
The Home Affordable Refinance Program
The Home Affordable Refinance Program or HARP as it is known is a mortgage help from government. It is designed with an aim to help all the creditworthy home owners who have been committed in paying all their mortgages on their home. HARP aims to help them refinance their mortgage to make their loan affordable. There are some eligibility criteria to be fulfilled to be eligible for this program. The following are the eligibility criteria for HARP:
* The home that you have taken on a loan has to be the primary residence.
* It can be a maximum of a four-unit premise.
* The loan that you have taken must be conforming and guaranteed by Fanny Mae or Freddie Mac (both are government-sponsored institutions).
* The EMI must have been paid regularly and has to be up-to-date.
* The mortgage taken in the beginning should not be more than 125 percent of the current market value of the home against which the loan has been taken.
* The final check is that the buyer must be able to pay the refinanced mortgage loan without hassles.
Home Affordable Modification Program (HAMP)
This mortgage help from government program aims at helping the eligible home owners to modify the mortgages they have taken and try to make them affordable to pay.
The program is primarily meant to take care of those people who have been affected by the recession in some manner. For example, their income has reduced or some other issues, which have increased their expenses so much that paying their EMIs has become a problem. The eligibility criteria for HAMP are as follows:
* The home that you have taken on a loan has to be the primary residence.
* The loan must have started before January 1, 2009.
* The initial loan taken should be less than certain amounts (specified in the website mentioned) for different sizes of house (in units).
* The EMI payment being made should be more than 31 percent of the total family.