Stop home foreclosure: federal HAMP as an option

Stop home foreclosure through the federal HAMP program

If you need to stop foreclosure, the federal Home Affordable Mortgage Program (HAMP) may have an option for you.

The HAMP program pays mortgage lenders to modify delinquent mortgages rather than initiate foreclosure procedures. It can help you if:

• Your mortgage predates January 1, 2009
• You are behind on your first mortgage
• Your mortgage is $729,750 or less
• Your monthly payments are over 31 percent of your gross income

If you face foreclosure and want to have the mortgage considered for relief under the Home Affordable Mortgage Program (HAMP), you must submit proof of income. This includes tax statements, paystubs and a statement of hardship before December 31, 2016.

Lenders who service eligible mortgages are required to modify any loans that will produce more income than a foreclosure sale would bring. They also must reduce payments on eligible mortgage to less than 31 percent of the borrower's income as follows. Lenders may forgive part of your principal balance, extend your repayment term or lower your interest rate.

You and your lenders will receive incentives from the government. If you make your adjusted payments on time, you'll receive a $1,000 deduction on the principal balance for every year for up to five years. Your lender will receive a one-time payment of $1,500.

If you think you can stop home foreclosure with the federal HAMP program, contact your mortgage lender or HAMP housing counselors directly to apply for loan modification. Your lender has all of the information you need to better understand the program.

Beware of loan consultants who ask for an application fee or offer you preferential treatment or any other government-sponsored mortgage assistance. There are no fees to apply for HAMP and no one can give you special treatment.

HAMP is not the only way you can avoid foreclosure. Other local, state and federal government programs may be available if you do not qualify. Your lender may also be willing to provide mortgage relief through an internal program. If you qualify for pre-foreclosure sale or short sale assistance, go to RealtyNow to find a real estate agent approved by the federal government to work with these programs.