In 2009, in response to the Nation’s economic crisis, the Obama Administration created the Homeowner Affordability Stability Plan.
Specifically, the Making Home Affordable program (HAMP) was created in an effort to help those who are struggling with making the mortgage payments on their primary residence.
HAMP includes loan modifications for interest rate reductions, principal reductions, and modifications for homeowners who are unemployed.
In particular, the HAMP loan modification operates by reducing your interest rate to as low as 2%. The term of you loan may be extended for up to 40 years. Any arrears may be capitalized throughout your loan (or wrapped into your loan) in order to reinstate the loan as current. A portion of the principal payment may be deferred to a balloon payment at the end of the loan term. A portion of your principal may be forgiven.
There are basic requirements in order for you to be eligible for a loan modification under HAMP.
HAMP typically requires a trial period where you would pay a modified monthly payment to your mortgage servicer for a specified period of time, and if you remain current during the trial period, your application will proceed to underwriting to determine whether your loan modification is approved or denied.
If you file a Chapter 13 Bankruptcy during your trial period, the mortgage servicer may not file a motion for relief from the bankruptcy automatic stay, they cannot file an objection to your Chapter 13 plan, and they cannot move for dismissal based on lack of adequate protection. In other words, filing for Chapter 13 Bankruptcy in the middle of your trial period will not kick you out of your loan modification trial period.
If you file a Chapter 7 Bankruptcy, and you do not reaffirm the mortgage debt, a HAMP modification does not impose post petition personal liability on the debt. In other words, despite a HAMP loan modification, if you do not reaffirm your mortgage debt, your personal liability will discharge in your Chapter 7 Bankruptcy.
If your home is currently in foreclosure, applying under the HAMP loan modification program prevents the servicer from pursuing a foreclosure sale.
If you are currently in foreclosure, and there has been a foreclosure sale date scheduled, you need to act now.
You should contact a foreclosure defense or bankruptcy attorney as soon as possible. The foreclosure defense and bankruptcy attorneys at Tudhope Law, have helped hundreds of people in Central Florida defend, stop, or delay foreclosure proceedings.
As part of the application process, you will be required to submit documents which prove your source of household monthly income.
For more information, contact the Orlando loan modification attorneys at Tudhope Law. They will assist you in obtaining such information, as well as obtaining a loan modification for your home.
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