HAMP Offers Assistance for Underwater Loans

August 09, 2010

There’s no need for Chicago homeowners to take a dive. If your home loan is for more than the value of your home, that is, if you’re underwater on your loan, the

Equifax Personal Finance Blog has details of a program that can help.

This particular program is for homeowners who are currently employed but whose mortgage is more than 31 percent of their income and whose property has lost value to the point that the loan amount is higher than the appraisal amount. (A separate program is designed especially for the unemployed.) Another requirement is that you are either delinquent on your loan or you are in imminent danger of becoming delinquent.

The new program is part of the Federal government’s Home Affordable Modification Program (HAMP). Real estate expert Ilyce Glink gives details of it in her Equifax post, “

Want a Principal Reduction Loan Modification? The New Home Affordable Modification Program (HAMP) Rules You’ll Have to Live By.”

It works like this: You apply, submitting certain IRS forms and recent pay stubs as proof of income. You find out in 30 days whether or not you can participate in the program. This is a big deal because people often used to wait months just to hear if their loans could be modified even on a trial basis. If you are accepted, then your mortgage will be divided into two loans, the first for the current value of your home and the second as an interest-free loan that’s forgiven over the course of three years.

Getting approved for the program is a little tricky. It’s not for Fannie Mae, Freddie Mac or FHA borrowers because those lenders are coming out with their own programs later in 2010. Some private banks are offering similar loan modifications for their borrowers who are in trouble but who don’t meet the HAMP requirements.


Equifax Personal Finance Blog has more details, in addition to a forum where you can ask your questions or post your comments. Visit today so you can start pursuing mortgage relief for your underwater home.

About The Author

Read All Stories By Carol Morgan

Carol Flammer is a public relations and social media marketing expert, strategist and consultant. With 20 years of experience, Carol has established herself as the “go to” for real estate and construction products public relations and social media. Carol is president of Flammer Relations, Inc., and managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Atlanta and Chicago.

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