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(Home Affordable Modification Program)

How does this program help me?

This is one of two terrific programs that came out of the Obama Administration (the other is the Home Affordable Refinance Program, or H.A.R.P.).  If you are in default on your loan, or if you are in "imminent risk" of default (meaning, you look like you might start having problems making your payments) this program will help you.

This program is designed to get your monthly house payment to equal 31% of your gross monthly income. 31% is considered a house payment a person can afford comfortably. The program will first take your interest rate down to as low as 2%. If that is not enough to reach the 31% goal the program will also extend the terms of the loan out to as long as 40 years. If that still isn't enough to reach 31% a portion of your home loan will be sliced off and put on a "shelf". There are no payments due on that portion of the loan and no interest accrues. You will be asked to pay it off if you sell or refinance the house in the future.

Who should I contact?

Only your servicer can do this program. Your servicer is the company you mail your monthly mortgage payments to. Get out your monthly mortgage statement and call the customer service number on it. Ask to apply for the Home Affordable Modification Program. It is often their "loss mitigation" department that handles these types of programs so they might transfer your call there. Just so you are aware, it is the law that they participate in the program!

What should I expect?

You will need to have patience. It is a very complicated, hands on process. The servicers will be overwhelmed and it could easily take several months. However, while your application is being processed temporary payment relief may be granted. Also, they will stop any foreclosure proceedings while they analyze your application.