HAMP Paperwork Bog you Down? Try again in July!

As many of our clients have learned the hard way, the HAMP and HARP loan modification and refinance programs created by the Obama administration during the early years of the recession required a lot of paperwork. A LOT of paperwork: proof of income, hardship documentation, tax returns, and other documents. The programs have helped millions of Americans afford to stay in their homes, but the fact was that the banks simply did not have enough employees to competently handle all of the paperwork. I cannot tell you how many times I have sat with struggling homeowners at our office in Mobile, Alabama and heard that despite their best efforts at providing all of the documentation, the mortgage companies would repeatedly ask for the same paperwork several times, and finally deny the modification because they were “missing documentation” that the clients had sent to them 3 times.

The administration seems to finally be catching wind of this and has decided to set up a new program that will hopefully solve the problem by not requiring such stringent documentation. If your loan is backed by Fannie Mae or Freddie Mac, then you can qualify for a modification if your loan is between 3 and 24 months delinquent. Your mortgage servicer should send you a letter in July 2013 offering you the chance to apply for a modification. This will require you to make three timely trial payments, and if you do, then you can qualify for a permanent modification. The new loan would have an interest rate at or below the market rate (which is the lowest in history now, and won’t change any time soon).  If your home is underwater, then you will not have to pay interest on a portion of your balance until you have had some time to build up equity in your home.

So check back with us in July for an update on this new program. Hopefully thousands of our clients in Mobile and Baldwin County, Alabama will get some help staying in their homes.