Posted on: 25th Aug, 2009 09:44 pm
Does any one know how HAMP is calculated, if you do can you provide an example?
67jor]e
67jor]e
Hi elaine,
The Home Affordable Modification Program is aimed at helping struggling borrowers to get affordable mortgage payments. The monthly mortgage payments are expected reduce to such an extent that the PITI ratio would not exceed 31% of the borrower's gross income. But a lot depends on the individual lenders and the borrower's particular situation. Thus, depending on your individual situation, the modified payments may exceed 31% of your gross income.
The Home Affordable Modification Program is aimed at helping struggling borrowers to get affordable mortgage payments. The monthly mortgage payments are expected reduce to such an extent that the PITI ratio would not exceed 31% of the borrower's gross income. But a lot depends on the individual lenders and the borrower's particular situation. Thus, depending on your individual situation, the modified payments may exceed 31% of your gross income.
Is the total outgo on two homes is not 31% of the total income including the rental, do I qualify for HAMP??
Hi Dee,
As far as I know, in order to qualify for Home Affordable Modification Program (HAMP), the property should be the borrower's primary residence and the borrower should at present live in it. I don't think your rental property will not qualify for HAMP.
Thanks
As far as I know, in order to qualify for Home Affordable Modification Program (HAMP), the property should be the borrower's primary residence and the borrower should at present live in it. I don't think your rental property will not qualify for HAMP.
Thanks
I am developing a consumer / public interest calculator for the HAMP procedure at the ArmDisarm web site. I have a free trial calculator that will calculate the procedure for low-middle class situations for free and maybe charge a few dollars for the higher value calculations
All the documents I have been able to find on the HAMP procedure break it into the same steps. First, certain costs are added to the loan, like the unpaid interest that has accumulated if the loan hasn't been paid on time. At any time there is an opportunity, but not a requirement, for principal forgiveness where some of the loan is simply forgiven. Second, the interest rate is lowered towards 2% in an attempt to get the payment down to 31% of your income. Third, if that doesn't do it, the term of the loan can be extended to 40 years. Fourth, if that's still not enough to make it affordable, a non-interest balloon payment will be created at the end of the loan and the lender will just have to wait 40 years to get that part of the money back.
But there is a catch. The lender gets to run a calculation that compares the modified loan to an immediate sale of the home. If an immediate sale is the better deal then it will be sold instead of modified. This is a likely outcome when there is a large step 4 balloon, but perhaps in other cases too.
I know my answer is a bit dated -- the last post was in Feb and now it is July -- but I hope it helps some people....
Paul
All the documents I have been able to find on the HAMP procedure break it into the same steps. First, certain costs are added to the loan, like the unpaid interest that has accumulated if the loan hasn't been paid on time. At any time there is an opportunity, but not a requirement, for principal forgiveness where some of the loan is simply forgiven. Second, the interest rate is lowered towards 2% in an attempt to get the payment down to 31% of your income. Third, if that doesn't do it, the term of the loan can be extended to 40 years. Fourth, if that's still not enough to make it affordable, a non-interest balloon payment will be created at the end of the loan and the lender will just have to wait 40 years to get that part of the money back.
But there is a catch. The lender gets to run a calculation that compares the modified loan to an immediate sale of the home. If an immediate sale is the better deal then it will be sold instead of modified. This is a likely outcome when there is a large step 4 balloon, but perhaps in other cases too.
I know my answer is a bit dated -- the last post was in Feb and now it is July -- but I hope it helps some people....
Paul
If user has to payoff his/her HAMP Loan and his Note Balance is $300.00 and Principal Forbearance amount is $50.00 than while doing the payoff will the amount of forbearance be deducted from the note balance amount and user will have to payoff $250.00 for loan or he/she has to payoff $300.00.
my mortgage is 4300.00 with taxes and insur i have three incomes helping so i dont have to put all how much should i present to the bank first gross is 9,553.00 with three people or two at 5656.00 for modification
Hi jmc,
If you're the borrower of the mortgage, then you should present your income to the lender. You don't have to inform the lender about the income of others.
Thanks
If you're the borrower of the mortgage, then you should present your income to the lender. You don't have to inform the lender about the income of others.
Thanks
Hi JMC,
If oyu used their income to qualify for the loan in the first place, the bank will dig into their income too.
Eric
If oyu used their income to qualify for the loan in the first place, the bank will dig into their income too.
Eric
How much Gross income do you need to qulify for HAMP. I am about 12 payments behind
Well, I don't know whether or not there is any maximum gross income noted in case of HAMP. But, it is true that on a single family home, the maximum loan amount should be an unpaid balance of up to $729,750. Also, with the help of HAMP, the borrower's monthly mortgage dues are reduced to 31% of their gross monthly income.
My mortgage is an interest only loan, I pay 1569 including taxes and home insurance. My income is 2,927.33 my expenses are 3211.00 would I qualify for a modification
Hi Dee,
You will have to contact your lender and apply for a loan modification. The lender will go through your situation and let you know whether or not you'll be able to get a modification.
Thanks
You will have to contact your lender and apply for a loan modification. The lender will go through your situation and let you know whether or not you'll be able to get a modification.
Thanks
How does the 31% thing work when you are trying to modify a 1st and a 2nd mortgage
Your lender will be the best person to let you know about it. Contact your lender and apply for loan modification. He will clarify all your doubts.
Reducing my interest rate on my mortgage from 7.37% to something like 5% would reduce my monthly payment by over $400 which would also be less than 31% of gross income. Does having unsecured credit card debt prevent qualification for a loan modification even though the extra monthly cash flow would help make credit card payments easier as well?