Thursday, May 31, 2012

HAMP Changes Take Effect Friday June 1

Effective Friday, June 1, 2012 HAMP “Tier 2”  -  which many people have simply referred to as HAMP 2.0  -  will roll out for the Making Home Affordable (MHA) loan modification program.  Like many MHA updates, these changes apply to non-GSE mortgages. 

The goal of HAMP 'Tier 2' is to increase eligibility for homeowners, including:
  • those who did not meet the original HAMP guidelines,
  • those who may have failed on a HAMP modification, or 
  • those who own rental properties.

With HAMP 'Tier 2', many of the initial qualification criteria are still in place:
  • loan must have been originated before January 1, 2009, 
  • homeowner must be able to document a financial hardship;
  • Only loans on properties with one-four units can be modified;
  • there is a maximum outstanding loan amount (maximum unpaid principal balance.

But now, a borrower may also be considered for HAMP 'Tier 2' if any of the following also apply:
  • they did not successfully complete (defaulted on) a HAMP 'Tier 1' modification;
  • their monthly mortgage payment is below the minimum 31 percent front end Debt-To-Income ratio;
  • and, most controversially, up to three seperate mortgages may be modified if they secure rental properties
No mortgage loan may be modified more than once in either Tier 1 or Tier 2. 

People interested in learning more about the HAMP program and the new 'Tier 2' changes, can visit the Making Home Affordable website, here.

The Homeownership Advisors Network will continue to focus its attention on helping owner-occupants avoid foreclosure, but may be able to answer some basic questions for rental property owners as well.

HAMP, HAMP 2.0, DTI, VPN, HARP, MHA, GSE... the 'alphabet-soup' of programs, agencies and programs can be overwhelming for struggling homeowners.  In Minnesota, there is a FREE, effective resource available: The Homeownership Advisors Network.  Trained and certified foreclosure prevention experts can work with YOU to find a solution to YOUR mortgage issues.  Don't delay, contact an advisor by visiting the Center's website today.

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