Waltham, MA (PRWEB) April 10, 2012
HAMP will now offer incentives to Fannie Mae and Freddie Mac to forgive debt on homes with mortgages that are upside down, also known as principal reductions. John McGeough and Anthony Lamacchia, co-brokers and owners of McGeough Lamacchia Realty, believe these HAMP updates will allow more homeowners to avoid foreclosure through reduced monthly mortgage payments or by doing a short sale on a home they can no longer afford.
HAMP was introduced in March 2009 as a way to help homeowners on the verge of foreclosure lower their mortgage payments. HAMP also includes Home Affordable Foreclosure Alternative, or HAFA, for homeowners who are unable to pay their mortgage and need to transition out of their homes. HAFA was updated this year to better streamline the process for homeowners seeking a short sale. These updates include the elimination of occupancy requirements for eligibility and up to $8,500 for second liens.
Since less than $11 billion of the $29 billion set aside for the program has been spent, no new funds need to be allocated for the HAMP program. Help will now be available to homeowners who didn’t successfully complete a HAMP trial period or who fell out of a permanent HAMP modification due to missed payments.
Lenders will now get added incentives to reduce the principal on a homeowner’s mortgage. When a lender reduces part of the principal owed on the mortgage they will get paid 18 to 63 cents on the dollar, three times the payment offered in the previous version of HAMP. Fannie Mae and Freddie Mac loans will now be included in the principal write down as well. These loans had previously been excluded.
In the previous version of HAMP, a homeowner’s debt to income ratio had to be over 31 percent based on the first mortgage debt only.The new version of HAMP will now factor in other types of debt such as medical bills and second mortgages.
HAMP now offers help for unemployed homeowners as well. HAMP will grant borrowers who lost their job a forbearance period which reduces or suspends their monthly mortgage payment. The forbearance period can be as long as twelve months, allowing borrowers to find a job and avoid foreclosure.
Homeowners will be able to apply to the expanded program starting June 1, 2012. The deadline will also be extended for another year, until December 31, 2013.
About McGeough Lamacchia Realty:
McGeough Lamacchia Realty is the number one Real Estate Agency in Massachusetts and named one of the Top 100 Real Estate Teams by the Wall Street Journal in 2010. They are a full service real estate agency specializing in short sales serving Massachusetts and New Hampshire.
For a list of the updates made to HAMP, visit the Short Sale New England Blog