Make Homes Affordable Program: Easy Steps to Get Your HAMP Request Approved

Homeowners have been struggling foreclosures ever since the recession started. Government has implemented the make homes affordable program to help struggling homeowners keep their homes. However, since HAMP was created under time pressure, there have been some flaws that caused heavy criticism from consumers, to include slow turnaround times and high rejection rate. Therefore, there have been some changes done to the program to assure a clear understanding of the process along with specific timeframes to make decisions on consumer applications under HAMP.

Note: while these “insurable” homes are good deals, you may face stiff competition from other homebuyers and novice investors. If you need to use financing, FHA guidelines will not allow you to borrow more than the HUD asking price. This means you will have to come up with cash out of pocket if you want to beat a competitor offering more than the asking price. So much for your small down payment! However, if you don’t make any offers, you will lose 100% of the bids, so go ahead and throw in your hat for the right properties. Homes with less than $5,000 in required repairs are classified as “insurable with repair escrow”. Other buyers are not as eager to bid on properties in need of work, which means less competition and deeper discounts for you. Also, many people are unaware that the traditional FHA 203(b) Loan Program will allow you to finance these repairs into your loan, instead of paying them out of pocket, via a 203(b) Repair Escrow. At settlement your lender will place the repair money in a set-aside account for you to make the necessary improvements after the loan funds.

Steps For Successful Loan Modification- The first thing to do is to find a knowledgeable loan modification specialist. There are many agencies working in the loan modification field, however, they all have different success rates and level of expertise. Finding the one that is truly professional and well versed in HAMP is half job done. Second thing on your list would be getting your case evaluated by a loan mod professional. During initial consultation, your individual case is assessed against the program requirements and eligibility grounds are established. In addition, loan mod specialist may advice you of other options that may be available to you to prevent foreclosure. A proper strategy is developed, assuring the best chances of approval. After the case review and deciding what would be best for you, an application is prepared. In addition, a full list of required supporting documents is handed to you to ensure your loan servicer would have a complete picture of your case.

This is where the FHA 203(k) Home Renovation Loan Program becomes very useful. The FHA 203k Renovation Loan offers borrowers the ability to finance most repairs and improvements on a property, even allowing thousands of dollars for the purchase and installation of large appliances. The FHA renovation loan amount is based on the AFTER-REPAIR value, minus your 3.5% down payment. The eligible improvements allowed on FHA 203(k) loans are numerous, and many clients are pleasantly surprised at just how useful this loan can be. With the right improvements, you can create a really great home with more than 50% equity the day you move in. Note: as with the repair escrow program, your greatest obstacle will be finding a lender willing to make 203(k) renovation loans. Most banks do not want the administrative burden of managing the escrow disbursements after closing, nor do they want to take the additional risk that you will fulfill your obligations to repair the property and bring it to its improved value after closing. Be persistent in your search, though, and you will be greatly rewarded with one of the banking industry’s best-kept secrets.

Post-Approval Steps- Your HAMP application approval may be exciting, but it is not the end of the game. Homeowners are given a 3-month trial period to prove they are able to keep their obligations under new loan arrangements. In case you are able to make timely payments on your modified mortgage during the trial period, these changes would become permanent.

Learn more about Obama Making Home Affordable Mortgage Program.

Tagged with: affordable mortgage program • Make Homes Affordable Program • Making Home Affordable • Making Home Affordable Plan • Making Home Affordable Program • mortgages • Obama Making Home Affordable

Filed under: Mortgages

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