You recently lost your job, and the bills are starting to pile up. Your mortgage is still current, but the writing is on the wall: Unless something changes very soon, you may have to file for bankruptcy protection to avoid foreclosure.
Or so you think. But it doesn’t necessarily have to be this way.
Families or individuals struggling to make ends meet may not be aware of a federal program that can help them reduce their mortgage payments and avoid foreclosure entirely. Created in 2008 during the subprime mortgage crisis, the Home Affordable Modification Program (HAMP) is ongoing today and helps homeowners work with their mortgage lenders to modify their loans and lower monthly payments. If your first mortgage is equal to or less than$729,750 for a single-family home and your loan was underwritten before 2009, you may be HAMP eligible.
You may also be eligible if you are facing financial hardship, such as a layoff, reduced income, or unexpected medical expenses.A common misconception of the program is that you must fall behind on your mortgage payments to qualify. This is not the case.
HAMP is not a mortgage principal reduction program. Thus, the government will not “forgive” a portion of your mortgage principal. Instead, the program modifies your mortgage loan’s terms and conditions, resulting in a significantly lower monthly payment.
Though the program was extended last June by the Obama administration until the end of 2015, homeowners in financial distress should not delay. HAMP’s goal is to keep homeowners who are in danger of falling behind on their mortgage payments from doing so. If you wait until you are actually behind on your payments to apply for the HAMP program, you risk foreclosure while you await your program approval.
Our team of bankruptcy attorneys at Martin Attorneys, PA can assist in understanding and managing the HAMP process. For additional information on the program or on other debt-management solutions, please contact us at Martin Attorneys, PA.