If you are a homeowner who has received a home mortgage loan modification recently, chances are your lender offered you a three-month trial program. The three-month trial program is a creation of the Federal Government’s Making Homes Affordable Program (MHA). Homeowners are required to make a mortgage payment for three months in a row, normally on the first of each month. The homeowner must make the payments on-time and not miss a single one in order to qualify for a loan modification under the MHA Program. At the end of the three months, lenders consider the financial circumstances of the qualifying homeowners and may offer a loan modification. If the lender participates, the lender receives financial incentives from the government. However, the lender is not required to offer up a loan modification at the end of the three months.
Many homeowners have expressed concern because they are doing their part by paying the three monthly payments but the banks are not required to offer a reasonable loan modification even if the homeowner successfully completes the three-month trial program. In response, President Obama’s administration “kicked off” a new program on November 30, 2009, to help homeowners get a permanent loan modification after their three months of payments. The program is being administered by the Department of Housing and Urban Development (HUD).
The Home Affordable Modification Program (HAMP) has helped more than 650,000 homeowners. There are currently 375,000 homeowners in the three month trial program. This program is designed to make temporary assistance into permanent results.
Nevada homeowners should recall that if they are put into foreclosure on their residential Nevada home, they may use the Nevada Foreclosure Mediation Program to force the lender to negotiate in good faith. The homeowner may try to get into a HAMP loan modification in the mediation process. Using the mediation process can give a homeowner additional leverage when negotiating with a bank.
To view the government’s press release regarding the new campaign click here.
Carlos McDade, Esq.