The Home Affordable Modification Program (HAMP) has helped thousands of Nebraskans to modify their home mortgage payment.  A loan modification can lower the interest rate, establish an escrow account to pay taxes and insurance, and cure past due mortgage payments.  When this program works it is really magical—a loan can go from unaffordable and in foreclosure to being affordable and in good standing overnight.

You may be able to obtain a HAMP loan modification if the following is true:

  • You are struggling to make the payment because of a financial hardship
  • You are delinquent or in serious danger of become delinquent on the loan.
  • Your mortgage was obtained on or before January 1, 2009.
  • The property has not been condemned.
  • You owe less than $729,750.

The problem is, the banks are difficult to work with and homeowners get lost in the shuffle of paperwork and red tape.  There are horror stories of banks losing the paperwork over and over again.  The rules are complicated and not all loans are eligible for modification.

So how do you level the playing field?  How do you make sure the bank plays fair and that your application is really taken seriously?

The best way to make sure your loan modification is properly handled is to have a certified housing counselor review and submit the paperwork.  The Department Housing & Urban Development (“HUD”) provides a list of approved housing counselors in Nebraska here.

Some of the key benefits of submitting the application through a HUD counselor:

  • It is harder for the bank to claim they never received the paperwork when HUD counselors submit the paperwork.
  •  HUD counselors submit thousands of applications so they know the correct way to fill out the paperwork.
  •  There are a variety of modification programs available.  HUD counselors know what programs you qualify for and which ones you do not.
  •  HUD counselors usually charge no fee or a minimal fee to process the application.

Can you obtain a loan modification if you have filed for bankruptcy?  The short answer is yes.  In fact, when facing a foreclosure it is often a good strategy to file Chapter 13 to stop the foreclosure sale and then to immediately file a new loan modification application with a HUD counselor.  Chapter 13 cases can be dismissed or amended if the application is accepted.  Chapter 13 gives you time to properly file the application in an organized manner.

Image courtesy of Flickr and Andrey 77 dron

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