PROGRAM SUCCESS – SPRING 2013 PAGE 29
Restoring the American Dream:
HAMP Extension Offers Homers Hope
By Keith Loria
During President Barack Obama’s most recent State of the Union address, he spoke about
the American Dream of owning a home and how that dream has been shattered for many
due to the collapse of the housing and mortgage markets over the last few years. However,
Obama offered hope to homeowners recently by extending the Home Affordable
Modification Program (HAMP), which can help many homeowners refinance and take
advantage of historically low interest rates.
HAMP also offers incentives to mortgage lenders to encourage them to refinance and
modify existing mortgages by lowering interest rates and reducing mortgage
balances to the current value of the property.
Launched by the federal government in 2009, HAMP was slated to expire on
December 31, 2012, but was extended for one year until December 31, 2013.
The extension of the program included an expansion of the eligibility rules
to make it available to even more homeowners.
It is believed that millions of additional homeowners will now be eligible to
take advantage of the federal program to bring down the costs of owning a home and even help many avoid foreclosure altogether.
In February, new eligibility criteria were released to mortgage lenders and servicers and homeowners may begin submitting
applications under the new rules in May. Until then, homeowners can submit applications for modifications under HAMP to their
lenders under the existing eligibility guidelines.
There are several changes to the HAMP guidelines that homeowners should be aware of:
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-Homeowners found to be ineligible under the current debt-to-income ratio of 31 percent may now be eligible under the new
-Previously, non-owner occupied homes and owner-occupied homes with tenants were not eligible. However, the new guidelines
would allow tenants in part of the home as long as the home is owner-occupied, or the owner intends to take occupancy. It is
believed that approximately 700,000 landlords will be eligible under the revisions to HAMP.
-People who were approved for a HAMP trial period, but did not make the payments as scheduled, would be eligible for
consideration for a modification under the new eligibility criteria.
-Homeowners who missed payments under an approved HAMP
modification, as opposed to a trial period, would be eligible to
reapply under the new rules.
In addition to the HAMP extension, the Obama administration
announced that it would triple incentives to owners of mortgages
that reduce home loan debt and expand eligibility to borrowers
struggling under the weight of other liabilities such as medical
bills. The extension will apply to all loans, including those held
by Fannie Mae and Freddie Mac, the government-sponsored
For more information about the new HAMP guidelines, contact
our office today.