We might think for a while that the worst of financial crisis is over, but this is not the case. There are millions of people who are still struggling to meet their commitments and have still not recovered. Various markets are being encouraged with many incentives to assist these people in need.

The property market is no different and U.S. President Barack Obama has introduced a new program for assisting people in need. Its called Home Affordable Modification Program (HAMP). This program will help people in paying their mortgages quite easily. It will reduce the monthly payments which will be a huge relief for the homeowners.

With the help of this program, homeowners monthly payments will go down to 31% of their pre-tax income, even less in few cases. This modification plan will only be accepted if the modification equals net more value than foreclosure would.

In order to qualify for this program, you have to meet 4 main criteria:

  • The residence on which you want your monthly payments to be modified should be a primary one.
  • Your monthly mortgage payments should be more than 31% of your pre-tax monthly income.
  • Your loan amount cannot exceed $729,750
  • You have to prove that you cannot afford the current monthly repayment plan.

There is one more benefit of this program. Homeowners who get approved for this program are eligible for $5000 credit to reduce principal debt on their very first mortgage. But there is one criteria here that has to be met. You should not miss even a single payment and pay it in a timely manner for five years.

Once you meet the above requirements, there’s a government plan called monetary stability plan in which the mortgage providers have to necessarily participate if they receive funds from the government.

This move is not something that the government has taken out of kindness. In fact, this is a positive economic step taken with the motive of stimulating the economy and leading to expansion.

All those who are having a hard time in making their mortgage payments and are unable to figure out on how to solve the problem, look into this program introduced by the government. Otherwise, the lenders and the housing market will see huge losses again.

More information about Home Affordable Modification Program (HAMP) at:  http://www.makinghomeaffordable.gov/programs/lower-payments/Pages/hamp.aspx

This entry was posted on Thursday, May 24th, 2012 at 2:50 pm and is filed under Loan Modification, Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

1 Comment

  1. May 30, 2012 @ 7:49 pm

    I heard that the approval rates for this program are very low. Is this what you’ve found? Anytime the government wants to help, I always wonder how much they can actually help.

    Posted by John