While the United States of America is close to three (3) years into the loan modification process, many homeowners still do not understand the basic guidelines to actually qualify for this government backed program. They are as follows:
Qualification guidelines for HAMP
· The house to be mortgaged should be the primary residence of the homeowner and not an investment property. It also takes into account second mortgages.
· Your existing home mortgages should have been originated prior to January 1st, 2009.
· The value of your current mortgages should not exceed $ 729,750 for a single unit family home.
· The homeowner is required to furnish a letter of listed financial hardships along with the reasons for the loss of income.
· The homeowner’s existing monthly mortgage payments should be more than 31% of your gross monthly income.
· The homeowner needs to submit proof of regular monthly income and details of monthly expenses.
If the homeowner falls under the above mentioned guidelines, the homeowner can expect the process to take roughly 2-3 months due largely in part to the volume of homeowners attempting to qualify. . They are then put on a trial modification plan for three (3) months at which point the investor decides whether or not to extend a long term modification plan to the homeowner.
A new program called The Home Affordable Unemployment Program has been announced by the Treasury Department, and took effect on July 1, 2010. This new program provides servicers the flexibility to provide assistance to borrowers whose hardship is related to unemployment. According to this new program, when a borrower is unemployed, a HAMP trial period plan or permanent HAMP modification may not be offered to the borrower as the borrower may not have the ability to make the required payments.
If a borrower is unemployed, and is currently receiving unemployment compensation, and states unemployment compensation as the sole source of income on the HAMP application, the servicer will be required to consider eligible borrowers for the Home Affordable Unemployment Program. Under the Home Affordable Unemployment Program, a servicer will grant borrowers a forbearance plan during which regular monthly mortgage payments are reduced or suspended. During this trial period plan, borrowers will be evaluated for HAMP. A borrower who is unemployed and requests assistance under HAMP must be evaluated for and, if qualified, receive an Unemployment Program (UP) forbearance plan before the borrower may be considered for HAMP.
Servicers are required to offer an Unemployment Program forbearance plan to a borrower who meets the following HAMP minimum eligibility criteria:
-The mortgage loan is secured by a one- to four-unit property, one unit of which is the borrower’s principal residence.
-The mortgage loan is a first lien mortgage loan originated on or before January 1, 2009.
-The current unpaid principal balance of the mortgage loan is equal to or less than $729,750.1
-The mortgage loan is delinquent or default is reasonably foreseeable.
-The mortgage loan has not been previously modified under HAMP and the borrower has not previously received an UP forbearance period.
Additional UP forbearance plan eligibility requirements include that the borrower:
-Makes a request before the first mortgage lien is seriously delinquent (before three monthly payments are due and unpaid). A request for UP may be made by phone, mail or email. Servicers must document the date of the UP request in the servicing file and, within 10 business days, confirm the receipt of the request with the borrower via mail or return email.
-Is unemployed at the date of the request for UP and is able to document that he or she will receive unemployment benefits in the month of the Forbearance Period Effective Date (defined below) even if his or her unemployment benefit eligibility is scheduled to expire before the end of the UP forbearance period.
The servicer may require a borrower to have received unemployment benefits for up to three months before the forbearance period will begin. A borrower who has received unemployment benefits for less than the minimum time period required by the servicer may request consideration for an UP forbearance plan; however, the forbearance period will not begin until after the borrower has received unemployment benefits as required by the servicer.
To be eligible for HAMP, a borrower’s total monthly mortgage payment (principal, interest, taxes, insurance and association fees, if any) prior to the modification must exceed 31 percent of the borrower’s gross income. To streamline the delivery of unemployment assistance, a servicer may waive this criterion for UP forbearance plan eligibility. However, servicers are not required to offer an UP forbearance plan to borrowers whose total monthly mortgage payment is less than or equal to 31 percent of the borrower’s monthly gross income, including unemployment benefits. Servicers are not required to offer an UP forbearance plan if a household member that is not a borrower becomes unemployed, even if that income contributed to the mortgage payment.
In order to foreclose on a property, a bank must first obtain a Final Judgment of Foreclosure. There is a specific procedural process that must be followed before a court may enter a Final Judgment of Mortgage Foreclosure. Many banks, specifically in South Florida, have been circumventing these procedural safe guards in order to obtain these final judgments on an expedited basis. As a homeowner in South Florida, it is imperative that you hire a foreclosure defense attorney to protect these essential procedural practices.
Before a bank obtains the Final Judgment of Foreclosure, it must establish that it legally holds and owns the note and mortgage, and therefore, is entitled to enforce both. Ideally, both documents should be attached to the Foreclosure Complaint, but this is not always the case. Many times, the bank will allege that the note has been lost, and will include a count to establish the lost note. More often than not, the bank will find the note, and move the court for entry of a Final Judgment of Foreclosure.
Pursuant to Florida Rules of Civil Procedure, all evidence upon which the bank relies to establish ownership of the note and mortgage, must be served upon all parties twenty days prior to the hearing on the Final Judgment of Foreclosure. In South Florida, specifically Miami-Dade and Broward counties, these procedural safeguards are consistently violated by banks. However in, Verrizzio v. Bank of New York, the Second District Court of Appeals of Florida held that these sloppy and loose procedural practices are not to be tolerated. The Verrizzio opinion explained that the promissory note constituted a portion of the evidence that the bank relied on in its Motion for Final Summary Judgment, and therefore the note must have been served upon all parties twenty days prior to the hearing on the motion. This procedural precaution is specifically important where the bank has filed a count to establish a lost note, and the note was not attached to the original complaint.
It has become practice for banks in South Florida to file the note and other evidence it relies upon in its Motion for Final Summary Judgment the day of the hearing. This procedure is in direct violation of Florida law and should preclude the entry of a Final Judgment. Unfortunately, if a South Florida homeowner, has not hired a foreclosure defense attorney, this procedural safeguard may be violated and may cause the loss of your property. Hiring a foreclosure defense attorney in Miami Dade and Broward County will ensure that all legal procedures are followed by your bank.