Many US homeowners have been fighting to keep their homes in the face of dire economic conditions and potential foreclosure. Luckily, struggling homeowners can take advantage of mortgage loan adjustment programs. These federally supported mortgage adjustment programs are available through many government-sponsored entities (GSEs), such as Freddie Mac. Two types of mortgage loan adjustment are provided by Freddie Mac: its traditional adjustment program and the Home Affordable Modification Program (HAMP).
Standard Mortgage Modification
Only homeowners who have mortgages owned by Freddie Mac are eligible for its modification programs. The mortgage giant’s conventional mortgage adjustment program might make sense if you are already behind in your payments or going to drop behind. Standard mortgage adjustment through Freddie Mac involves a written agreement between you and mortgage servicer which changes one or more terms of your loan. A better option for many homeowners with Freddie Mac-owned mortgages, even though, may be the Home Affordable Modification Program, or HAMP.
Available through Dec. 31, 2013, HAMP allows homeowners who have Freddie-owned mortgages to modify their mortgages to lower interest rates. To qualify for HAMP mortgage adjustment you must have taken out your mortgage loan prior to Jan.1, 2009. Also, only mortgages on primary residences qualify to your HAMP program. Furthermore, homeowners must not be eligible for the federal Home Affordable Refinance Program (HARP). HAMP additionally demands that you have a documented financial hardship to qualify for mortgage adjustment.
Other HAMP Requirements
Freddie Mac-approved HAMP loan adjustment is intended for homeowners jammed by endothelial mortgages. To apply for Freddie-specific mortgage adjustment, homeowners must be spending over 31 percent of the pre-tax income in their mortgage payments. Mortgage payment costs can consist of principal, interest, taxes, insurance and homeowner or condo association dues. Homeowners approved by Freddie for HAMP engagement spend some time at a trial period which requires on-time mortgage payments prior to their loans are permanently modified.
If you can’t qualify for Freddie Mac’s traditional or HAMP mortgage adjustment programs, other alternatives are available. As an example, homeowners who have Freddie-owned mortgages might be eligible for the Home Affordable Foreclosure Alternatives (HAFA) program. HAFA features brief sales and deeds-in-lieu of foreclosure programs from Freddie Mac which can allow you to escape your mortgage. Though you can’t keep your home when you choose HAFA, you might qualify for $3,000 in transfer money in addition to counseling services.