Watch Out for HAMP Mortgage Modification Denials

HAMP stands for the Homeowners Affordable Modification Program and it’s the Obama Administration’s foreclosure-prevention program. The attractive feature since April 2010 is that the program specifically permits folks in current bankruptcy cases to still pursue HAMP modifications.

Today a client (who had recently entered into a 3-month Trial Mortgage Modification Agreement with his mortgage company) just informed me that after he was one week late on his second monthly payment, his mortgage company suddenly terminated him from their program and rescheduled his sheriff’s sale. He now faces a sheriff’s sale in less than two months.

The sad part is that although the client was one week late, he had decided to make two payments at once in order to catch up. Alas, his mortgage company, Chase Home Finance, still rejected him.

The lesson—-if you’re applying for a loan modification, you have to follow it precisely. Fill out the paperwork precisely. If the mortgage company needs more paystubs or bank statements, then supply them. Remember that the mortgage servicing companies are looking for ways to reject your HAMP application. Remember that they are in the foreclosure business and not the loan modification business! So, if you don’t make your trial modification payments on time, then you may be out of luck!

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