Orlando Loan Modification Attorneys
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.
- The loan modification must be for a loan on your primary residence, and must be owner occupied.
- The amount owed on your first mortgage must be equal to or less than $729,750.00.
- You must have experienced a hardship regarding your ability to stay current on your monthly mortgage payment.
- Your current mortgage must have been before January 1, 2009.
- The current monthly mortgage payment on your first mortgage must be more than 31% of your gross (before taxes) monthly income. The monthly mortgage payment includes principal, interest, taxes, insurance, and homeowner’s association dues.
- Bankruptcy does not disqualify you under HAMP
- Neither a Chapter 7 nor Chapter 13 bankruptcy filing disqualifies you for a loan modification under HAMP. In fact, if you have an open Chapter 7 or Chapter 13 bankruptcy case, and request a loan modification, under HAMP you must be considered for a loan modification.
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.
HAMP Modifications Stop Foreclosure Sales
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.
Proof of Income
As part of the application process, you will be required to submit documents which prove your source of household monthly income.
- If you are on a salary or hourly wages, you will be required to submit two most recent pay stubs that show your year-to-date earnings.
- If you are self employed, you must submit your most recent quarterly or year-to-date profit/loss statement.
- If you are on social security, disability or death benefits, pension, adoption assistance, public assistance, or unemployment, you must submit copies of the benefits statement, and two most recent bank statements indicating receipt of the payment.
- If you are relying on domestic support income, such as, alimony or child support, you must provide a copy of divorce or other court decree; or separation agreement or marital settlement agreement; and two most recent bank statements indicating receipt of the payment. Please note, this must only be disclosed if you desire the servicer to calculate it towards your household income.
- If you are current on your mortgage at the time of application, you will need to provide copies of the most recently filed and signed federal income tax return including all schedules and attachments.
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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