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IndyMac Mortgage Services Blog

Blog Series Part 4: What if I am Denied Due to Previously Receiving a HAMP Modification

11/02/2011

As of June 1, 2012, the information in this article may no longer be accurate due to changes in the Home Affordable Modification Program. For updated information, please view our article regarding new HAMP eligibility requirements for borrowers.

Previous HAMP Test2In part 4 of our blog series, Denied for HAMP: What Does This Mean?, we will give insight into why you may have been deemed ineligible due to having previously received a HAMP modification and suggest alternative options that may be to available to you.

What if I am denied because I have already received a HAMP loan modification?

HAMP guidelines restrict borrowers from receiving more than one Home Affordable Modification, regardless of the number of properties or mortgages a borrower may have. This means that if you have received a Home Affordable Modification in the past, you will not be eligible for an additional modification under HAMP on any other mortgage or property you may have.

If you are in need of further financial assistance, there are a number of alternative options, as outlined below, that you may wish to consider.

What happens if I am denied for HAMP because I have already received a HAMP loan modification?

If you were denied for HAMP, there are helpful alternatives that you may choose to pursue. These options vary by investor and state restrictions and may include a non-HAMP alternative modification program, repayment plan, forbearance plan, refinance, short sale, or deed-in-lieu of foreclosure. Details of each of these programs are outlined below:

  1. Alternative Modification - This is an alternative to the Home Affordable Modification Program. To qualify, borrowers must meet investor guidelines, fully document income, and satisfy all requirements for the specific alternative modification program.
  2. Forbearance Plan - With this option, a servicer may reduce your mortgage payments for a specific period of time, potentially allowing you to improve your financial situation and become current on your loan.
  3. Repayment Plan - This option allows you to repay your delinquent payment amounts by spreading the amount over several months. Along with your regular monthly mortgage payment, a portion of the delinquent amount will be paid each month over the term of the plan.
  4. Refinance – A refinance allows you to renegotiate the terms of your mortgage by paying off your existing loan with the proceeds from a new loan with a lower interest rate or other favorable terms.
  5. Short Sale – This option allows you to sell your home at a market value when it is worth less than the total amount owed. The loan delinquency will register on your credit report as “Settled for Less than the Full Balance Owed.” While this option may adversely affect your ability to obtain credit in the future, it is usually less damaging to your credit score than a foreclosure. Consult a tax accountant, tax attorney, or real estate attorney for credit advice and tax implications before considering this option.
  6. Deed-in-Lieu of Foreclosure – If you are unable to qualify for a short sale, you may be eligible for a deed-in-lieu of foreclosure, which is an option that will allow you to settle your outstanding loan obligation by transferring ownership of the mortgaged property to the lender. The property must be free of any other liens in order to be considered for this option. If a deed in lieu transaction is completed on your property, we will report that your loan was in default and resolved by acceptance of a deed in lieu of foreclosure. Please, consult a tax accountant, tax attorney, or real estate attorney for credit advice and tax implications before considering this option.

When considering any of these alternatives, it is important that you contact our customer contact representatives to review each option and find out which alternatives may be available to you based on your financial situation.

Additional Questions?

If you have any additional questions about the requirements for HAMP or what to do if you are denied for HAMP, please feel free to contact one of our loan counselors at 1.800.781.7399.