Loan Modification Programs
Questions about loan modification programs typically come up during conversations about qualification for a loan modification. Many people hear or are interested in “what it takes to qualify for a loan modification” and miss the detail (if it is ever given) regarding what program they are referring to.
Simply put anyone can qualify for a loan modification. This is because (1) a loan is an agreement and (2) a modification is a change. It only takes the people involved to agree to change the previous contract. This is normally referred to as an Internal Modification because the qualifications are determined “in-house” and extremely flexible. The Federal Government is unlikely to reimburse a bank for an internal modification.
The fundamental requirements for qualification are: a willingness to enter into/facilitate a work-out agreement/loan modification; display a financial hardship; and have the financials to support the agreement.
Loan Modification programs seem to be different variations of the Fannie Mae loan modification guidelines found in the Fannie Mae Single-Family Servicing Guide. Fannie Mae had the most extensive research/input due to the fact they had been the largest purchaser of mortgages in the secondary market. This means they had more to lose than the average repurchase.
The most popular of the loan modification programs is the: Home Affordability Modification Program or HAMP. This was the loan modification program instituted by the Obama administration which is occasionally referred to as Obama loan modification or the Obama loan modification program. Like any other Home loan modification program this has its own requirements, potential outcomes, loan modifications, and incentives to lenders to be involved. The HAMP requires that a home be owner occupied (not a rental property), the borrower have a willingness to enter into/facilitate a work-out agreement/loan modification; display a financial hardship; and have the financials to support the agreement.
Falcon Credit Management Believes The Nevada Foreclosure Mediation Program may be one of the most beneficial and underused loan modification programs with approximately 10% of people who qualify enrolling.