Modification Agreements

This section will attempt to provide a base knowledge of some of the most common types of modifications available to borrowers currently. “Modification Agreements” comprise a vast array of options. Before diving into them, please keep in mind a few things:

*The options listed below are options available through the Making Home Affordable Program offered by the government. Individual lenders also have in-house modifications that could potentially be available in the event you do not qualify for a federal program. In-house modifications will not be discussed as their requirements and availability depend primarily on each individual lender. Should you wish to inquire about in-house modification possibilities, you should call your mortgage company and ask to speak to someone in the “loss mitigation” or “modification” department.
*Not all mortgage companies participate in the Making Home Affordable Program. Additionally, lenders may participate in some of the programs listed below, but not all of the programs. To determine whether your lender participates in any of the other programs listed below, please visit the government’s website at http://www.makinghomeaffordable.gov, or contact your lender.
*This is not a complete list of the options available under the Making Home Affordable Program. It is a list of the programs which are most applicable to the majority of homeowners. If you do not feel that any of the programs discussed below are applicable to your situation, please visit http://www.makinghomeaffordable.gov to see if there are any other options available to you.
*The Making Home Affordable Program has currently been extended through December 31, 2013. If you are reading this after that date, you will need to determine whether the Program is still in effect. If it is not, these options may be of no use to you.
*Given that you are at a website dedicated to foreclosure options and alternatives, it is likely that your home is either set for foreclosure, or you have a feeling things may be heading in that direction. Applying for any of the following programs will NOT guarantee that the foreclosure will be stopped. Your mortgage company will likely halt foreclosure proceedings if you are being evaluated for a modification, BUT IT IS NOT GUARANTEED. Try and get any statement that a foreclosure has been postponed in writing or recorded (if legal in your state). Foreclosures might still occur even though the borrower was told that it would not occur “because of the loan modification application.” If you are set for foreclosure and are not fully satisfied that a foreclosure has been halted pending your modification evaluation, please contact an attorney to discuss your particular situation.
*Each of the availability and eligibility requirements come directly from the makinghomeaffordable.gov website.

Tips When Preparing to Apply for a Loan Modification

The loan modification application process can be a confusing, complicated and lengthy process.  When the lender repeatedly asks for new applications to be completed and more documentation to be sent in, it can be tempting to jump on the first modification offer that is presented to you, even if the offer is not in your best […]

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Information and Warnings about the Modification Application Process

Any quick internet search can pull up hundreds (and probably thousands) of horror stories relating to the HAMP application process.  The same is probably true for all of the programs detailed in this section, but HAMP will specifically be discussed in this article because it is the most prevalent program and the most often applied […]

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Home Affordable Modification Program (HAMP)

This is easily the most well known of all loan modifications.  It may or may not be that HAMP is the “best” or the most applicable to your situation.  But it is easily the most applied for of the programs, and it is typically what people think of when they think of the Making Home […]

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Principal Reduction Alternative (PRA)

This is exactly what it sounds like.  If you owe more than your home is worth, the Principal Reduction Alternative allows a lender to write down the Note to the value of the home.  For example, if you owe $200,000, but your home is only worth $150,000 (and you can convince your mortgage company that […]

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2nd Lien Modification Program (2MP)

This is not so much of a standalone option as it is an extension of HAMP.  If you have had a primary loan which has been permanently modified under HAMP, the 2MP allows the lender on your second mortgage to modify the second mortgage to contain more sustainable terms. The eligibility requirements for the 2MP […]

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Home Affordable Refinance Program (HARP)

HARP is not a modification program like the other programs that have been discussed.  It is an actual refinance of the property.  The terms of your original Note are not just being modified.  The original Note is being paid and a new Note is being created.  Just like with a regular refinance of a house, […]

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Home Affordable Unemployment Program (UP)

This is very similar to a forbearance agreement.  Actually, the terms of this program are very similar to the Fannie Mae and Freddie Mac forbearance agreements discussed here.  The UP is unavailable on Fannie Mae and Freddie Mac loans. This program allows for either payments to be reduced to 31% of your income or for […]

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