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HAMP and Other Government Programs

“Home Affordable Modification Program” – (“HAMP”) also known as “Making Homes Affordable”

 The Emergency Economic Stabilization Act of 2008 (EESA) was signed into law by President Obama on October 3, 2008.   In implementing the Act, the United States Treasury has instituted a number of programs, including the “Making Homes Affordable” Act, the “Capital Purchase Program”, and the “Troubled Asset Relief Program” (“TARP”), among others.  The stated goals of these programs are to keep homeowners in their homes by modifying their mortgages with such things as interest rate reductions, term extensions and principal forbearance or forgiveness.

According to the Homeowner Affordability and Stability Plan, the Home Affordable Modification Program, and the United States Treasury Supplemental Directive 09-01 (also known as the “Making Home Affordable Program”), the Treasury Department requires all Financial Stability Plan recipients to participate in foreclosure mitigation plans consistent with the U.S. Treasury’s loan modification guidelines.  The goal of HAMP is to modify the borrower’s loan such that the borrower’s monthly payment is equal to 31 percent of the borrower’s gross monthly income.

In fact, most major residential mortgage servicers have committed to the Home Affordable Modification program by signing formal “Participation Agreements” with the United States of America, in which the mortgage servicers agree to postpone foreclosures and modify loans for eligible borrowers.  Click here for a list of Residential Mortgage Servicers committed to the Home Affordable Modification program through a formal Participation Agreement with the United States of America.

To ensure that a borrower currently at risk of foreclosure has the opportunity to apply for the Making Home Affordable Program, mortgage servicers have been instructed by US Treasury that they should not proceed with a foreclosure sale until the borrower has been evaluated for the program and, if eligible, an offer to participate in the program has been made.  Servicers must use reasonable efforts to contact borrowers facing foreclosure to determine their eligibility for the Making Home Affordability Program, including in-person contacts at the servicer’s discretion. Our attorneys can help you in your attempt to obtain a loan modification under these programs.  Call Howard Law at 800-872-5925 for a consultation.  For more information on these government programs,please click here.