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a guide to HAMP loan modifications

Under the guidelines established by the Department of the Treasury for the Home Affordable Modification Program (HAMP), your servicer will need several documents from you in order to evaluate you for a HAMP modification.

the hardship affidavit

First, you will need to give an explanation of your financial hardship and the reason you cannot or believe you may soon not be able to make your mortgage payment. The government has given examples of acceptable hardships:

  • Reduction in or loss of income that was supporting the mortgage.

  • Change in household financial circumstances.

  • Recent or upcoming increase in your monthly mortgage payment.

  • An unavoidable increase in other expenses.

  • A lack of cash reserves to maintain payment on the mortgage and cover basic living expenses at the same time. (Cash reserves include assets such as cash savings, money market funds, stocks or bonds, but exclude retirement accounts.)

  • Excessive monthly debt payments and over- extensions with credit cards. For example, you have been using credit cards, a home equity loan or other credit to make your mortgage payment.

  • Other reasons for hardship detailed by the borrower.

documentation you must provide

The HAMP program requires your servicer to collect the following information from you:

  • 1.

    Your current monthly household income from all sources including salary or wages, tips, bonuses, alimony, retirement benefits, unemployment benefits or public assistance. Be sure to know when your unemployment or other benefits are scheduled to expire. It is important that you have evidence that unemployment benefits will continue for at least nine months. If applicable, borrowers should also provide documentation of other income including social security, disability, death benefits, pension or public assistance such as letters, insurance policies or statements and should be able to show the frequency and duration of the benefits. Borrower must also provide the two most recent bank statements showing receipt of such payments.

  • 2.

    Two most recent pay stubs from your current employer showing year-to-date earnings.

  • 3.

    IRS Form 4506T signed and dated by each borrower.

  • 4.

    If you are self-employed, your most recent quarterly or year-to-date profit/loss statement.

Go to www.homeloanlearningcenter.com to learn more about financing your home. 1 of 2 © 2009 Mortgage Bankers Association. All Rights Reserved.

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