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Home Affordable Modification Program (HAMP): ModificationTips

Produced by Attorney Mariah Jennings-Rampsi for Massachusetts Law Reform Institute
Reviewed February 2015

Are you looking for a mortgage modification? Here are some tips to help you figure out if you qualify for the federal Home Affordable Modification Program (HAMP).

Step 1.

Any mortgage company can offer a modification.

But certain things have to be true to get a Making Home Affordable Modification (HAMP).

  1. Your mortgage payment is 31% or more of your gross income
  2. You are struggling to make your mortgage payments,
  3. You got your mortgage on or before January 1, 2009,
  4. The company that owns your mortgage or the company you make payments to is part of the program. These may be 2 different companies. See Step 2.
  5. Your property has not been condemned, and
  6. In the last 10 years, you have not been convicted of a crime in connection with a mortgage or real estate transaction and
  7. you owe up to $729,750 on:
    • your primary residence
    • a rental property that has up to 4 units.

Step 2.

You may be dealing with 2 companies.

One company owns your mortgage. They are the “investor”. 

The other company is the company you make your mortgage payments to. They are the “servicer”.

If you have your mortgage with a local bank, chances are the bank is both the investor and servicer.

If the investor, or the servicer, signed onto the HAMP program, you can apply. Find out online if the investor or the servicer of your mortgage must review your loan for a HAMP modification.

Find out if the company that owns your mortgage offers HAMP or a version of HAMP

Enter your address and Social Security Number and the site will tell you if that company owns your mortgage.

Find out if your servicer offers HAMP

The HAMP website lists all servicers that are part of the program.

Step 3.

If everything in Step 1 is true,

  1. tell your mortgage company you want to apply for a HAMP loan.They will mail you a package that should include 2 form. . You can also get the forms online:
  2. Fill out and send the 2 forms to the mortgage company
  3. Include these documents:
    • 2 most recent bank statements
    • 2 most recent paystubs
    • If you get any other income, like Food Stamps, SSI, SSDI, Pension, Social Security – include proof of this income too. You can use a benefits letter. If you get child support, you can use the Child Support Order.
    • If you are self-employed a profit loss statement.  See a sample
    • Most recent, signed, federal tax return
    • A Hardship Statement that tells the mortgage company why you fell behind on your payments and why you need a modification. See a sample
    • Explain any documents that are missing in writing. For example, if you do not have a bank account, you need to write to the mortgage company to explain why you are not including bank statements.

Step 4.

After you apply, call your loan servicer once a week. 

  • Ask if they are waiting for anything to complete your application.
  • Ask which department the application is with.
  • Each time you call, keep a record of:
    • the date
    • who you spoke with, and
    • what they said.

It is important to know when the servicer considers your application complete. They must write to you within 30 days once it is complete. The letter must say:

  • the foreclosure prevention options you are eligible for, and
  • they options they tried to give you but did not, and why they did not.

Once your mortgage is complete, keep calling once a week to find out where in the process your application is. You want to make sure it keeps moving along:

Your application moves from the “loss mitigation” or “retention” department to a “loan negotiator “ or “underwriter”.

From there it might go to a “quality control” department.

Then, sometimes it goes to the “investor “for approval.

If your application stays in “loss mitigation”, for more than 2 weeks the mortgage company probably thinks your application is “incomplete.” Keep checking every week to make sure they have all the documents they need so they can review your application.

How can I tell if my mortgage payment is 31% or more of my gross income?

Add up all of your income before taxes are taken out. Include, your salary, wages, Social Security, or other benefits or other income like alimony, child support, or self-employment rental income.

Multiply the total amount by .31

If your total mortgage payment, including taxes and insurance that the mortgage company pays for you equals or is less than .31  x your total income  then you are not eligible for the HAMP program.

What can I do if they deny my application?

If you get a letter that says your application is denied, ask why. Your servicer must give the reason they will not give you a HAMP modification.. They must send you the decision and explanation in writing.

Mortgage companies often make errors and deny applications by mistake. Check the reason for their denial. Follow up with your mortgage company to correct any errors.

If you think the reason they will not give you a modification is wrong, appeal the decision. 

For example, if they say you did not qualify because your mortgage payment is already less than 31% of your gross income but your payment is really , tell them..

To appeal the decision write the servicer. Tell them what is the mistakes are. .Send them paperwork, if you can, to prove that their reasons for denying your application are wrong.

Learn more about the HAMP guidelines and rules: The “Supplemental Directives” include important additions to the Handbook.

Common mistakes that result in denials

  • Not submitting a complete application
  •  Not signing tax returns  Make sure you sign and date the paper returns you send in, even if you filed your taxes online.
  • Not properly documenting income
    • If you are self-employed, you need to submit profit and loss statements.
    • If you get Social Security or other income like alimony, child support, or rental income, you need to give the mortgage company copies of documents that prove this income.
  • Getting frustrated when the servicer does not have a complete packet  -
    For example, you faxed documents. The person collecting faxes at the mortgage company lost the signature page of your tax return.. Your application will not move. They will deny your application for  "failure to return requested documents."
    It is frustrating, but check the status weekly. Send in everything they ask for, then check to make sure they got it. 
  • Not submitting everything requested because it does not make sense.

For example, you may assume you do not need to send in the 4506T - request for transcript of tax return. You must provide the 4506T, even if you have submitted your tax returns. Your application will only be marked complete if you provide everything they ask for, even if it you do not know why. If they ask for anything you cannot provide, write and explan why you cannot provide it.

More information about the Making Home Affordable Program.

If your rental property has more than 4 units and you owe more you may still be eligible for HAMP.

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