by Thomas D. Richards, Lawyer Referral Service Panelist
The Home Affordable Modification Program (HAMP) is a federal program that offers loan modifications that can lower your interest rate, lower your payments, and help you keep your home and avoid foreclosure. The lender, if a part of the program, will send you a packet of forms to fill out. In addition to the financial statements, you will need to supply paycheck stubs, bank statements, tax returns, and an “affidavit of hardships” explaining why you are in this predicament with your mortgage and what caused the delinquency. Typically, it is an illness, loss of a job, death of an income earner, or other catastrophe beyond your control. These types of modification loans can take several weeks or more to be approved due to the large volume currently pending with each lender. If approved, your interest rate and payment are decreased substantially during the trial period and then gradually raised back up over time. This allows you to get caught up and takes some pressure off of you during the first few months. The lowered payment can continue for a year or more depending upon your income and the time it will take for you to get completely caught up on your back payments.