The FHA version of the Home Affordable Modification Program or HAMP, allows homeowners to modify their FHA-insured mortgages to reduce monthly mortgage payments and avoid foreclosure.
FHA-HAMP uses two tools to make the house payment affordable. One of these is a "partial claim" and the other is a modifications of the loan terms.
A partial claim is a claim the mortgage company files against the FHA mortgage insurance. The way the public thinks about it and the way it is often expressed is that it is said the missed payments are moved to the end of the note. More than just the missed payments may be included in the FHA-HAMP. Under a FHA-HAMP, up to 30 percent of the unpaid principal balance as of the
date of default may be included in the partial claim.
The modification of the loan terms involved two things. One, the loan is amortized to 30 years; that is, it is stretched back out to a thirty year note. The other thing is that the interest rate is reset to 200 basis points above the monthly average yield on United States
Treasury Securities, adjusted to a constant maturity of 10 years. That is .2% is added to the yield of the "ten-year T bill." This is a constantly changing number. At the time I am writing this it is 2.1807%. Add .200 to that and the interest rate should be 2.387%.
The goal of the FHA-HAMP is to get the loan affordable. Affordable is considered 31% of the borrowers gross monthly income.
I am now working with a client who has a loan with an unpaid principal balance of $133,400. If they got the maximum reduction under a FHA-HAMP, their payments would be reduced to $787.89 from a current payment of $1118.24. In order to be eligible they would need an income of $2542 a month.
There are various variables that may determine whether of not one gets a modification. As a certified and experienced housing counselor with a HUD-approved agency I can increase your chance of getting approved. For more information, call me: Rod Williams, 615-850-3453.
No comments:
Post a Comment