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Phone: (317) 536-2644
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Your rights as a homeowner Foreclosure Process Foreclosure Alternatives Decide What To Do HAMP
HAMP, HAFA, and other acronyms

The most well-known modification program is the Home Affordable Modification Program, or "HAMP." Treasury created HAMP in 2009 as a way to slow down the rising tide of residential foreclosures. The goal is to change the terms of the original loan so that it becomes more affordable for the homeowners. However, not every loan qualifies for a HAMP modification.

So, how do you know if your loan can be - or will be - modified under HAMP? And if you don't get a modification, then what?

1. Determine if you meet the threshold criteria for HAMP.

You are eligible for consideration only if:
  • You occupy the house as your primary residence.
  • You obtained your mortgage on or before January 1, 2009.
  • You have a mortgage payment that is more than 31% of your monthly gross (pre-tax) income.
  • Your mortgage loan balance is no more than $729,750.
  • You have a financial hardship that causes you to be either delinquent or in danger of falling behind on your payments.
  • You have sufficient, documented income to support the modified payment.
  • You have not been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.
  • If your loan is guaranteed by the FHA, the loan must not be more than 12 payments past due, and the total of all monthly debt payments (including payments on first and second mortgages, car loan and lease payments) must be under 55% of monthly gross income.
If you do not meet one or more of these criteria (particularly the 31% rule, or insufficient income), you may still be able to get an in-house modification, or be considered for another foreclosure alternative.
2. Determine if your loan servicer participates in HAMP.

Servicer participation in HAMP can be either mandatory or voluntary.
  • If your loan is owned or guaranteed by Fannie Mae or Freddie Mac, your servicer is required to evaluate you for a HAMP modification. Don't know? Use the lookup tools from Fannie Mae and Freddie Mac.
  • If your loan is insured by the FHA, your servicer is also required to evaluate you for foreclosure alternatives, including a HAMP modification.
  • If you don't have a Fannie Mae, Freddie Mac, or FHA loan, check to see if your mortgage loan servicer participates in HAMP. Don't know who services your loan? Check your most recent mortgage statement. The company who takes your monthly payments and sends out the statements is your loan servicer (not to be confused with how actually owns your loan - that's for a later step).
  • If you don't have a Fannie Mae, Freddie Mac, or FHA loan, and your servicer does not participate in HAMP, your lender may still be willing to modify your loan. Contact your servicer directly and ask.
3. Get your documents ready.

Here's what you will need:
  • Paystubs for the last two (2) months for each borrower and/or any other person who will be contributing money to pay the mortgage;
  • If any of the borrowers are self-employed, a year-to-date profit and loss statement and balance sheet;
  • Your last two (2) bank statements (for all checking and savings accounts);
  • Your last two (2) tax returns;
  • A current utility bill (to prove you still live in the home);
  • Your most recent bills for property taxes, homeowner's insurance, and homeowners' association dues;
  • What you spend each month on living expenses and other debts;
  • Any documents that support your story of why you can't make your mortgage payments, e.g., medical bills, unemployment verification, divorce papers, etc.; and
  • The value of any other assets you own, including cars, retirement accounts, and other real estate.
4. Find and fill out the required forms.

  • The standard initial application package has several forms, including a Request for Modification and Affidavit (or "RMA"), IRS form 4506-T (or 4506-EZ), and a Dodd-Frank Certification Form. These documents can be downloaded, or by calling your loan servicer.
  • Some servicers have their own application packets or online applications (usually based on the RMA), including Chase/EMC, and Bank of America / Countrywide, and CitiMortgage. If you aren't sure if your servicer has its own package, check its website or call its customer service department.
  • If you need or want assistance, free help is available from certified HUD housing counselors.
5. Submit the forms to your servicer.

  • The application may be either faxed or mailed to the servicer. If you mail your application package, make a copy of the entire package for your files, and do not mail any original documents. If anything goes missing (which happens - a lot), you will need to be able to send it in again, and you can't send it in if you don't have it anymore.
  • If you are working with a HUD counselor, he or she may also be able to submit your application through a web portal.
  • If your lender has already filed for foreclosure, you may also be able to submit your application through the lender's attorneys.
6. Verify that the servicer has a complete application.

Call your servicer to verify that your servicer has received your application, and that it has all the documents needed to conduct a review. Make notes of each call, including the date, time, representative's name, and what you were told. Check back once a week, if possible.
7. Wait while your servicer reviews your application.

It can take 30 days (or more) to do the review and send you the results. There are a few possible reasons or causes of this delay:
  • The servicer is short-staffed.
  • Your servicer has to run an NPV test. If you meet the initial qualifications for a HAMP modification, the servicer is also required to perform another calculation (called the Net Present Value, or NPV, test) to determine whether it would make more through a modification or a foreclosure. If you want to get an idea of whether or not you would pass the NPV test, go to
  • Ss part of the NPV test, the servicer may also have to get a valuation of your home and/or run a credit report.
  • The servicer did not receive (or lost) one or more of your documents. Hopefully, the servicer will let you know about the missing documents, either in a letter or when you call to see how things are going. If you get a request for additional documents, re-send them (and keep proof that the servicer received them). Yes, it's a pain to have to send the same documents over and over, but if you don't do it, you will be declined, and you may not be able to re-apply later.
8. Carefully review whatever letters or documents the servicer sends to you.

  • If you receive a letter offering a trial modification, make sure that you can make the payments. Remember, your loan has not actually been modified yet - you have to make all of these initial payments before you can be offered a permanent modification.
  • If you receive a letter requesting additional documents or information, get it to the servicer as soon as possible.
  • If you receive a letter saying that you have been declined for a HAMP modification, review the reason for the decline. It is possible that the servicer entered something wrong, had incorrect information, or just didn't follow the rules.
  • If the reason given was that you didn't pass the NPV test (see above), then you should be provided with the inputs the servicer used to apply that test. Review the inputs used, and see if they appear correct. Then go to and see if you come up with the same result.
9. Appeal, if necessary.

If you think you should have been approved for a HAMP modification, you can appeal the decision.
  • Appeal to a senior manager with the servicer.
  • If you can't get the matter resolved with the servicer within 30 days, you can get help from a designated escalation team.
  • If you think that your loan balance is wrong, that your payments weren't being applied correctly, or if you are told that the mysterious owner or investor of your loan does not modify loans, you can request that information from your servicer.
  • If you are really having troubles, you can also file a complaint with the Indiana Attorney General. Your complaint will be sent to the servicer to see if a resolution can be reached.
10. Consider another foreclosure alternative.

If are denied for a modification, the modified payment is still too high, or you just don't want to stay in the house anymore, then chances are that you will eventually have to move out of your home. After a foreclosure in Indiana, the homeowners are still responsible for any deficiency (the difference between the amount of the judgment and the price received at the sheriff's sale), unless (a) the loan is discharged in bankruptcy, or (b) the lender agrees to forgive the remaining loan balance. One way to get lender agreement and prevent a deficiency is the Home Affordable Foreclosures Alternatives Program ("HAFA").

HAFA is a sub-program of HAMP that covers short sales and deeds-in-lieu of foreclosure. Under HAFA, the servicer is required to waive any deficiency, and the borrower receives $3,000 to help with moving expenses. HAFA is available to borrowers that meet the initial qualifications for HAMP (except for the 31% test), but who do not qualify for a trial period plan, fail to make all the trial period plan payments, miss at least 2 payments in a permanent modification, or request a short sale or deed-in-lieu. The property must be free of liens and encumbrances (such as tax warrants, second mortgages, and/or other court judgments), and be listed for sale with a realtor. The process is similar to a regular short sale or deed-in-lieu, but uses forms prepared by Treasury.

The same steps as for a loan modification - gather the documents, prepare and submit the forms, reviewing everything you get back, and possibly appealing - also apply to a HAFA application. Therefore, having a good realtor (and possibly even a HUD counselor and/or an attorney) is invaluable in trying to get approved for HAFA.

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