Mortgage Modification Programs

Mortgage modification programs help you get your loan payments under control. A mortgage modification program allows you to change the terms of your mortgage through an agreement with the lender. You may be able to get a longer mortgage duration, lower interest rate or both, cutting your payments down.

1. Home Affordable Modification Program (HAMP): HAMP is a government-based mortgage modification program. The lender must participate in the HAMP program for you to apply for modification, and you must have gotten the mortgage before the first of January in 2009. The home the mortgage covers must be your main house (with less than five units) and the loan balance cannot exceed $729,750. You have to be able to prove your income is enough to cover the new payment amount, but you can get the payment lowered to 31 percent of your monthly income before taxes if you qualify. You don't have to be behind on your loan to get help from the mortgage modification program, but you must show that you may fall behind soon because of financial problems. You cannot have any past felony charges relating to real estate or home loan scams or fraud.
2. Second Lien Modification Program (2MP): The 2MP is a mortgage modification program specifically for second mortgages on a home. You must have be able to get a modification for your first mortgage through HAMP to qualify for 2MP, and you must not miss any HAMP payments. The second mortgage has to have a balance of at least $5,000 with payments of more than $100 each month.
3. Private Modification Programs: Your lender may have its own mortgage modification programs available. The process and term changes vary by lender, and you can contact your lender and ask for information on offered loan modification programs. Your lender may offer a more suitable program than HAMP or 2MP, so explore the options.