After the 2008 economic collapse that resulted in the downfall of the housing market, the U.S. government has been working hard to try and provide relief for families that were stuck. HARP was designed to allow homeowners to refinance and get a better loan suited for the home’s updated value.
HAMP, the Home Affordable Modification Program, set out to help the homeowners who, for the most part, was enduring some type of hardship (due to the economy) and had trouble paying their mortgage each month. Those who qualified for help under HAMP were the most at risk for foreclosure of their homes, so the government stepped in to help.
The main purpose of HAMP was to make mortgage payments more affordable in the long-term until the economy could be straightened out. Well, that time has come. HAMP was discontinued at the end of the year 2016, but a new, more streamlined successor has risen from the ashes.
Flex Modification and How It Works
The new idea, created by Fannie Mae and Freddie Mac, is a newer, better version of HAMP. HAMP was sort of a troublesome program that required a ton of paperwork, thus congesting the system. What this new flex modification does is takes out most (or even all) of the paperwork and easing the restrictions for users, making it easier to get help.
In order to receive a flex modification to lower your monthly payments, you must send in a Borrower Response Package if you’re less than 90 days behind. If all goes well, you should see a 20% reduction on your monthly mortgage payments. If you’re more than 90 days delinquent, then you won’t even have to provide borrower documentation.
Are You Eligible?
To qualify for this loan modification, you must:
-Have a mortgage owned by Fannie Mae or Freddie Mac.
-Submit a BRP (Borrower Response Package).
-Be at least 60 days late on payments.
-Prove your hardship.
-Have been started 12 months before your modification evaluation date.
*Reminder: If you’re 90 days or later, then some of these qualifications disappear. A lot of homeowners wait the 90 days before applying to make the process easier.
Getting help if you’re struggling to keep up with your mortgage isn’t a bad thing at all. There will be times during the owning of your home where finances might not always be in order. Being able to lower your payments will be able to improve your overall quality of life. Consider whether a home loan modification will work for you.
