Making Home Affordable An official program of the Departments of the Treasury & Housing and Urban Development

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Your loan servicer is the financial institution that collects your monthly mortgage payments and has responsibility for the management and accounting of your loan. It is possible that the owner of your mortgage also services it, however many loans are owned by groups of investors and these investors hire loan servicers to interact with homeowners on their behalf.  Many lenders also have the loan servicers handle all contact with homeowners.

For example, your servicer could be "Bank A" but the investor in your loan could be Fannie Mae, Freddie Mac or a group of investors.

If you have questions about your loan, or you are behind on your payments, you should call your loan servicer at the number on your payment coupon or monthly mortgage statement.

Answer

All servicers for loans owned or guaranteed by Fannie Mae and Freddie Mac are required to participate. Additional servicers are strongly encouraged to participate. You can get a list of participating servicers at http://www.makinghomeaffordable.gov/get-assistance/contact-mortgage/Pages/default.aspx

Answer

Eligible homeowners who are current on their mortgages but have been unable to take advantage of lower interest rates because their homes have decreased in value, may have the opportunity to refinance. Through a refinance under HARP, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they own or that they guaranteed in mortgage backed securities. To see if your mortgage is eligible for a refinance please visit http://www.makinghomeaffordable.gov/get-assistance/loan-look-up/Pages/default.aspx

Answer

Ask your mortgage lender or servicer. Also, both Fannie Mae and Freddie Mac have established toll-free telephone numbers and web submission processes to make this data available. Homeowners can enter information to determine if either agency owns or guaranteed the loan. This information is not a guarantee of eligibility for a refinance under HARP, as other qualifying criteria must also be met.

For Fannie Mae:
1-800-7FANNIE (8am to 8pm EST)
www.fanniemae.com/loanlookup  

For Freddie Mac:
1-800-FREDDIE (8am to 8pm EST) www.freddiemac.com/mymortgage

Answer

The objective of a refinance under HARP is to provide creditworthy homeowners who have shown a commitment to paying their mortgage the opportunity to get into a new mortgage with better terms.

Homeowners whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments. Homeowners who are paying interest only, who have a low introductory rate that will increase in the future, or who face a balloon payment may not see their current payment go down if they refinance to a fixed rate and payment. These homeowners, however, could save a great deal of money by reducing the amount of interest you pay over the life of the loan.

Refinancing into a more stable fixed-rate loan product and avoiding future mortgage payment increases would likely improve your ability to sustain your mortgage payments over the long-term. When you submit a loan application, your lender will give you a "Good Faith Estimate" and a "Truth in Lending Statement" that includes your new interest rate, mortgage payment, and the amount that you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.

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No. The objective of a refinance under HARP is to help homeowners get into more stable or more affordable loans. Refinancing will not reduce the principal amount you owe to the first lien mortgage holder or any other debt you owe.

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Your eligibility will depend, in part, on two additional requirements:

• The lender that has your junior lien mortgage must agree to remain in a junior lien position.
• You must be able to demonstrate your ability to meet the new payment terms on the first lien mortgage.

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The rate will be based on market rates in effect at the time of the refinance and the homeowner will be subject to any associated points and fees quoted by your lender. Interest rates may vary across lenders and over time as market rates adjust. The refinanced loans must have no prepayment penalties or balloon payments.

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No. The Home Affordable Refinance will not return cash to the borrower for the purpose of paying other debts.

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No. Homeowners who are currently delinquent or have been more than 30 days overdue during the past 12 months generally will not qualify. Contact your servicer to see if a modification under the Home Affordable Modification Program is an option for you.

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If your existing loan has private mortgage insurance, you will need the same amount of insurance coverage for a refinance under HARP. If your existing loan does not have private mortgage insurance, it will not be required as part of a refinance under HARP.

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Yes. HAMP helps homeowners who are struggling to keep their loans current or who are already behind on their mortgage payments. By providing participating mortgage loan servicers with financial incentives to modify existing first lien mortgages, the Treasury hopes to help homeowners avoid foreclosure regardless of who owns or guarantees the mortgage.

Answer

Participating servicers may not refer a loan for foreclosure sale or proceed with a foreclosure sale on an eligible loan until the homeowner has been considered for HAMP and, if eligible, a trial modification offer has been made. Participating servicers must use reasonable efforts to contact homeowners facing foreclosure to determine their eligibility, including in-person contacts at the servicer's discretion. Foreclosure sales may not be conducted while the loan is being considered for a modification or during the trial period. Additionally, once a homeowner has entered into a trial period plan by submitting the first trial period payment, the servicer may not take the first legal action to initiate a new foreclosure.

Answer

No. Responsible homeowners who are struggling to remain current on their mortgage payments are eligible if they reasonably believe they are very likely to default on their mortgage soon (often referred to by loan servicers as "imminent default"). This might be because a homeowner has had (or will have) a significant increase in the mortgage payment (due to a payment adjustment or rate adjustment upwards); unemployment or some other significant reduction in income; or some other financial hardship that will make the mortgage unaffordable.  If you are facing a similar situation, contact your servicer. You will be required to document your income and expenses and provide evidence of the hardship or change in your circumstances.

Answer

Participation in HAMP is mandatory for servicers of loans owned or guaranteed by Fannie Mae or Freddie Mac (Government Sponsored Enterprises or GSEs). Participation in HAMP is voluntary for servicers of non-GSE loans. However, incentives are available to servicers and investors who complete modifications under HAMP, and most major servicers already have committed to the Program. A current list of participating servicers is available at http://www.makinghomeaffordable.gov/get-assistance/contact-mortgage/Pages/default.aspx

Answer

If the organization that services your loan does not own it, your servicer may need to get permission from the owner or investor before they can change any of the terms of your loan. Generally, there is a contract between the servicer and the investor that states what kind of actions the servicer is allowed to take. Most of these contracts, usually called servicing agreements or pooling and servicing agreements (PSAs), give the servicer flexibility to make modification decisions as long as the modification provides a better financial outcome for the lender or investor than not modifying the loan.

Answer

Your servicer will determine whether you loan meets the eligibility criteria for the program.  Your loan may qualify if:

• the property is either owner occupied or a rental home that is not a vacation or second home;
• the unpaid principal balance is not more than the loan limits for the number of units involved (see below); and
• you have a financial hardship.

  Unpaid principal balance by number of units:

• 1 Unit $729,750
• 2 Units $934,200
• 3 Units $1,129,250
• 4 Units $1,403,400  
  • If your loan meets the minimum eligibility criteria, the servicer will ask you to provide documentation verifying your current income, assets and expenses, as well as any specific hardship circumstances, to determine if you are unable to make your mortgage payment. You will need to provide all verifying documentation before you can be approved for a loan modification trial period plan.
  • Your servicer will apply a Net Present Value (NPV) test to determine whether the value of the loan to the investor will be greater if the loan is modified (factoring in the government's incentive payments). If the modified loan is not of greater value, the investor and servicer may still modify the loan. However, modification in such cases is not required. Please note: Your servicer may re-run the NPV test before the modification becomes official if they receive new information that could affect the value of the loan).
  • If the modified loan is of greater value, the servicer must offer you a modification under HAMP, and, if you accept the offer, will put you in a trial period plan (which should be three months but it may be longer depending on your situation) at a new trial payment level.
  • If you successfully make all of the required trial payments during the trial period, your servicer will send you a modification agreement to execute.
  • You will be required to sign the modification agreement and other documents and attest that all of the information you provided to your servicer was true and accurate. Misrepresenting any information required for the Home Affordable Modification Program may be a violation of Federal law and has serious legal consequences.
  • Remember, if you do not qualify for HAMP, your servicer may offer you another foreclosure alternative solution that suits your financial situation.

Answer

If your servicer lowers your mortgage interest rate to make your payments more affordable, your initial modified interest rate could be below current market interest rates. In that case, the initial modified interest rate will be fixed for five years, and the amount you pay each month for principal and interest will not change for those five years or 60 months. After five years, your interest rate will increase by 1% per year until it reaches a cap, which is equal the market interest rate being charged by mortgage lenders on the day your official modification agreement was prepared (the Freddie Mac Primary Mortgage Market Survey Rate for 30-year, fixed-rate conforming mortgages).

If your initial modified interest rate is not below current market interest rates, your interest rate and monthly principal and interest payment will be fixed for the life of your mortgage.  In that case, your servicer will fix your interest rate to a rate based on the weekly Freddie Mac Primary Mortgage Market Survey Rate for 30-year, fixed-rate conforming mortgages with a risk adjustment.

Answer

Yes. All loans modified under HAMP must include an escrow account for payment of future property taxes and hazard insurance, unless prohibited by state law. If your existing loan does not include an escrow account, one will be established. A new escrow account may require collection of a sufficient reserve to pay the taxes and insurance on or before they are next due. The reserve amount cannot be added to the modified loan amount. The servicer may give you the option of paying the reserve amount at the time the loan is modified or the option of spreading the amount over a period of 60 months and including it in the monthly escrow payment.

Answer

Yes, you are still eligible to apply for a modification under HAMP.  Should you qualify for a modification and make all trial payments on time, your modification agreement with your servicer will require the servicer to set aside a portion of your new monthly payment in an escrow account for payment of your property taxes and insurance premiums.

Answer

It might. Your escrow payment will adjust if your taxes and insurance premiums change, so the amount of your monthly payment that the servicer must place in escrow will also adjust as permitted by law.

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The primary objective of HAMP is to help homeowners avoid foreclosure by modifying troubled loans to achieve a payment the homeowner can afford. Servicers may, but are not required to, offer principal reductions. It is more likely that your servicer will use interest rate reductions and term extensions in order to make your payment more affordable.

Answer

The trial period helps you and your servicer see if the new payment plan will work for you, while providing you immediate relief and preventing any possible foreclosure sales from occurring. You should remember that during the trial period, the terms and conditions of your original loan remain unchanged and only after you make all of your trial payments on time can the servicer offer you a permanent modification. The trial period should be a three month period (but it may be longer depending on your situation). If your trial period lasts longer than the time provided in your trial period plan notice, you should follow up with your servicer to inquire why it is taking longer, or call 1-888-995-4673 and ask for "MHA Help" to escalate your case. You should continue making your trial period payments for the duration of the trial period.

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Your monthly payment could increase if property taxes, homeowner's insurance, or homeowner's association fees increase after the trial period.

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Homeowners who are unable to make the required payments by the end of the month in which the payment is due are generally not eligible for a permanent modification under HAMP. However, you may be eligible for other foreclosure prevention options. See HAFA page on this web site – add the link here.

Answer

Accepting a loan modification can affect your credit score, but the actual effect will depend on a variety of factors. For more information about your credit score and how to improve it, visit www.ftc.gov/bcp/edu/pubs/consumer/credit/cre24.shtm.

Each month, servicers must describe to the credit reporting agencies the exact status of each mortgage. If you are current with your mortgage payments prior to the trial period and you make each trial period payment on time, your servicer must report you as current and also identify the loan as "modified under federal government plan."

If you are delinquent (at least 30 days past the due date) prior to the trial period, your servicer must report the level of delinquency and also identify the loan as "modified under federal government plan."

Answer

Your servicer will work with you to help determine if your loan can be modified through HAMP.  Following this analysis, if you qualify for HAMP, the servicer will place you in a trial period plan.  A trial period is about three months in duration (but it may be longer depending on your situation).  Once you make all of your trial period payments on time and meet any other trial period requirements, you will receive a modification agreement detailing the terms of the loan modification. Any difference between the amount of the trial period payments and your regular mortgage payment will be added to the balance of your loan along with any other past due amounts as permitted by your loan documents. While this will increase the total amount that you owe, it should not significantly change the amount of your permanently modified mortgage payment as that is determined based on your total monthly gross income, not your loan balance.

Answer

Once your loan is modified, your interest rate and monthly principal and interest payment will be fixed for the life of your mortgage unless your initial modified interest rate is below current market interest rates.

If the servicer lowered your mortgage interest rate to make your payments more affordable, your initial modified interest rate could be below current market interest rates. In that case, the initial modified interest rate will be fixed for five years, and the amount you pay each month for principal and interest will not change for those five years or 60 months.

After five years, your interest rate will increase by 1% per year until it reaches a cap, which is equal the market interest rate being charged by mortgage lenders on the day your official modification agreement was prepared (the Freddie Mac Primary Mortgage Market Survey Rate for 30-year, fixed-rate conforming mortgages).

Once your interest rate reaches that cap, it will be fixed for the life of your loan. Your new monthly payment will continue to include an escrow for property taxes and hazard insurance. Your monthly payment could increase or decrease if property taxes, homeowner's insurance, or homeowner's association fees change after the loan is modified.

Answer

Yes. If your servicer determines that a principal forbearance is required to get your monthly mortgage payment to an affordable level, the principal forbearance amount, say for example this was $20,000, would be subtracted from the amount used to calculate your monthly mortgage payment, but you would still owe the money. You would have a $20,000 balloon payment that accrues no interest and was not due until you pay off your loan, refinance or sell your house.

Answer

Homeowners who qualify for a modification under HAMP will never be required to pay a modification fee or pay past-due late fees. If there are costs associated with the modification, such as payment of back taxes, your servicer will give you the option of adding them to the amount you owe on your mortgage or paying some or all of the expenses in advance. Paying these expenses in advance will reduce your new monthly payment and save interest costs over the life of your loan.

If you would like assistance from a HUD-approved housing counseling agency or are referred to a HUD-approved counselor as a condition of the modification, you will not be charged a counseling fee. Homeowners should beware of any organization that attempts to charge an upfront fee for housing counseling or modification of a delinquent loan, or any organization that claims to guarantee success.

 

Answer

A HUD-approved housing counselor will talk to you about your situation and help you decide which mortgage options are best for you. A housing counselor will explain what documents you will need to provide to your mortgage company, can help you fill out the documents and may be able to contact the mortgage company on your behalf. A housing counselor can also help you make a budget so that you can meet your monthly mortgage payment and other expenses. A housing counselor will have information about local resources that may be helpful to you. For more information on working with a HUD-approved housing counselor go to:
http://www.makinghomeaffordable.gov/get-assistance/counselor/Pages/default.aspx

There is no charge to work with a HUD-approved counseling agency.

Answer

Homeowners, especially delinquent homeowners, are strongly encouraged to contact a HUD-approved housing counselor to help them understand all of their options and to create a workable budget plan. These services are free. Housing counseling is required, however, for homeowners whose total monthly debts are equal to or greater than 55% of their gross monthly income.

When you apply for a modification under HAMP, your servicer will analyze all of your recurring monthly expenses, including car loans, credit cards, child support, and what you will pay toward your mortgage. If the sum of all of these recurring monthly expenses is equal to or more than 55% of your gross monthly income, you must agree to participate in housing counseling provided by a HUD-approved housing counselor as a condition of getting a modification under HAMP.

Answer

Yes. Homeowners who receive a modification on their primary residence and make timely payments on their modified loans receive incentive payments. For every month you make a payment on time, you will accrue an incentive that reduces the principal balance on your loan. If your loan ceases to be in good standing (three monthly payments are due and unpaid on the last day of the third month), no further payments will be paid, including accrued but unpaid amounts. The incentive will be applied directly to your loan balance annually—up to $1,000 each year—and over five years the total principal reduction could add up to $5,000. This contribution by the Treasury is designed to help you build equity faster.

Answer

If you own a house that you use as a vacation home or that you rent out to tenants part of the year, the mortgage on that house is not eligible to be modified under HAMP. However, if you own a rental property that is rented or available for rent year round, you may be eligible for a HAMP modification.  Also, if you are in the military and have received a Permanent Change of Station (PCS) or are otherwise displaced and are not currently living in your home, you may be eligible for a HAMP modification.

Answer

Yes. Mortgages on and one- to four-unit properties are eligible.

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In July 2009, FHA launched the FHA-Home Affordable Modification Program (FHA-HAMP) to provide assistance to borrowers with FHA loans to modify their mortgages to provide more affordable payments.  FHA-insured first lien mortgage loans that are modified under FHA-HAMP may be eligible for certain incentive payments under Treasury FHA-HAMP.  VA issued guidance on its HAMP for loans guaranteed by the VA in January 2010.  VA loans may be considered for VA-HAMP or other loss mitigation programs offered by the VA.

Answer

To request a loan modification under HAMP, you must first contact your servicer and provide the following documents in an "Initial Package":

• Request For Modification and Affidavit (RMA)
• Tax Authorization forms 4506-T or 4506T-EZ
• Proof of Income

For more information, required documents, and complete details please see http://www.makinghomeaffordable.gov/get-assistance/request-modification/Pages/default.aspx

If you cannot find the required documents or have questions about the paperwork required, please call 1-888-995-4673 and ask for "MHA HELP."

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Contact your CPA (Certified Public Accountant) or the licensed tax professional who assisted you in completing your tax documentation.

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Other earned income (bonus, commission, fee, housing allowances, tips, overtime) must be documented by your employer in either your paystubs or other employment paperwork/contracts. Homeowners are encouraged to work with their employers to gather this information to describe the nature of the income and the continuity of the income.

Answer

You can provide a copy of benefit letters/statements, disability policy, or receipt of payments such as copies of two most recent bank statements showing electronic deposit of benefits. For additional information regarding social security, disability or death benefit income, contact Social Security directly toll-free at 1-800-772-1213 or visit their website at www.socialsecurity.gov. For all other benefits, you must contact the provider directly for additional information.

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Evidence of unemployment income may currently be obtained through the Department of Labor UI benefit tool, which is available at http://www.ows.doleta.gov/unemploy/ben_entitle.asp. (See "Home Affordable Unemployment Program (UP)" for more information about help for unemployed homeowners.)

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In such cases where a property has recently been rented, a signed Rental Agreement contract must be provided to show the property address, date of contract, lessees name and address, rental amount and rental period. The contract must be signed by all parties (lessor, lessee, rental agents etc.)

Answer

Gather the information listed below and contact the Office of Vital Statistics in the state where your divorce occurred. The homepage of the state's website will provide a link/information on how to contact the office of Vital Statistics. Generally, the documentation needed may include, but is not limited to, the following:

• Date of your divorce
• Full name of spouse
• Your driver's license number
• Purpose for which record is needed
• Your name and address, together with a self-addressed, stamped envelope

Answer

HAMP expires on December 31, 2013. You must have submitted your Initial Package by that date.

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Contact your servicer immediately and ask to be considered for HAMP. Servicers participating in the HAMP program are not allowed to proceed with a foreclosure sale until you have been considered for a modification under HAMP, and, if eligible, offered a trial modification. You may also contact a HUD-approved housing counselor for help by calling the Homeowner's HOPETM Hotline at 1-888-995-4673.

Answer

Under 2MP, when a homeowner's first lien is modified under HAMP and the servicer of the second lien is a 2MP participant, that servicer must offer to modify or provide some level of extinguishment on the borrower's second lien. The 2MP offer will be made in reliance on the financial information provided by the homeowner in conjunction with the HAMP modification and without additional evaluation by the second lien servicer.

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For a list of 2MP participating servicers please visit http://www.makinghomeaffordable.gov/programs/lower-payments/Pages/lien_modification.aspx

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If you become unemployed, contact your servicer immediately. You can phone, email, or write to your servicer to request an UP forbearance plan. Your servicer must be a participating HAMP servicer in order to offer the program. Visit http://www.makinghomeaffordable.gov/get-assistance/contact-mortgage/Pages/default.aspx to find out if your servicer is a program participant.

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The UP forbearance period is the lesser of twelve months long or when you are re-employed, as permitted by investor and regulatory guidelines. Contact your servicer for more information.

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During the UP forbearance period, your monthly mortgage payment must be reduced to no more than 31 percent of your gross monthly household income (payment could also be suspended entirely). Be sure to make these payments in a timely manner so as not to jeopardize your eligibility.

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If you get a new job during the forbearance period, let your servicer know. Otherwise, 30 days before your forbearance period expires, your servicer will provide you with an Initial Package of documents so that you can request a modification through the Home Affordable Modification Program (HAMP). Return the Initial Package immediately so that the servicer can formally evaluate you for HAMP.

Answer

No. UP is only available for first mortgages.

Answer

The servicer will determine your eligibility for HAMP without unemployment income.  If you are determined to be ineligible for HAMP, the servicer will consider you for other home retention options. If homeownership is no longer an affordable or desirable option, the servicer will consider you for additional foreclosure avoidance programs, including Home Affordable Foreclosure Alternatives Program (HAFA).

Answer

The Making Home Affordable Program will include additional foreclosure avoidance options through the Home Affordable Foreclosure Alternatives (HAFA) Program. The primary options available through HAFA include Short Sale and Deed-in-Lieu of Foreclosure.

Answer

In a Short Sale, the homeowner sells the property for less than the full amount due on the mortgage. When a homeowner qualifies for the HAFA Short Sale, the servicer approves the Short Sale terms prior to listing the home and then accepts the payoff in full satisfaction of the mortgage.

Answer

With the Deed-in-Lieu of Foreclosure, the homeowner voluntarily transfers ownership of the property to the servicer in full satisfaction of the total amount due. The servicer may require that the homeowner list and market the property before they agree to a deed-in-lieu arrangement. In order for the Deed-in-Lieu of Foreclosure to work, the homeowner must provide a marketable title, free and clear of other mortgages, liens, or other encumbrances.

Answer

• There should never be a fee for assistance with or information about the Making Home Affordable Program.
• Beware of any person or organization that asks you to pay an upfront fee in exchange for a counseling service or modification of a delinquent loan. Do not pay – walk away!
• Beware of anyone who says they can "save" your home if you sign or transfer over the deed to your house. Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.
• Never make your mortgage payments to anyone other than your mortgage company without their approval.

Answer

• First, get the help you need to avoid foreclosure. Contact your servicer immediately.
• Contact a HUD-approved housing counselor through the Homeowner's HOPETM Hotline at 888-995-4673.
• Report the scam at
• https://www.ftccomplaintassistant.gov/
• http://www.loanscamalert.org/report-scams.aspx
• To learn more about foreclosure rescue or loan modification scams, go to http://www.makinghomeaffordable.gov/learn-more/Pages/beware.aspx