Monday, May 17, 2010

HAMP Update: Twice As Many Homeowners Kicked Out Of Obama Foreclosure Program As Given Permanent Relief, New Data Show

Before indulging in vitriol, why don't we look at the actual facts and policies associated with the program. What are the specifics of program eligibility? The home must be a primary residence, the mortgage must be less than $729,750, the applicant must be having difficulty making payments, have payments greater than 31% of his/her income, and have received the mortgage before Jan 1, 2009. For a permanent modification, borrowers must make all trial payments on time. The relevant criteria to the current article is (1) the size of the payments relative to income and (2) the timliness of the trial payments.

(2) is fairly straightforward; if you don't make payments on time after the trial modification, you don't qualify. What about (1)? The most important question in this: how is income initially determined for the trial period? According to the HAMP FAQ "Your servicer may initially accept verbal income and expense information; however, you will need to provide verifying documentation before a final modification is approved... If you successfully make all of the required trial payments during the trial period and the income and expense information you provided is determined to be accurate, your servicer will execute an official modification agreement."

If you misrepresent your income verbally to the lender - whether intentionally or because of an honest mistake - the trial modification becomes invalid. The borrower also has a responsibility to know his/her financial situation.
Read the Article at HuffingtonPost