The HAMP Program In the News FAQ's
The key is in the homeowner's ability to show true hardship, proper reporting of income and expenses, and their ability to meet the financial obligations under the new terms. When accurately and correctly compiled and presented, you greatly improve your chances of getting the approval from your lender with excellent benefits that include:
  • Lower Mortgage Payments
  • A Lower Fixed Rate
  • As Low as 2% under the HAMP Program
  • $5,000 Credit on your Loan Balance
  • Past Due Balance Erased
  • Penalties and Late Fees Waived
Home Loan modifications are a positive solution for lenders and borrowers alike, but people who submit their own proposals often fail because it can be a daunting and frustrating process that is truly best handled by professionals experienced with financial practices.

" With years of experience processing loan applications for banks, we know precisely what lenders are looking for in a loan modification proposal, and how to present your hardship case."
Our extensive experience with virtually all of the major banking institutions and mortgage companies allows us to create loan modification proposals specifically tailored to meet any lender's requirements of content and form. Apart from some basic documentation, your only other contribution that's required is your signature on your "Bank Ready" loan documents Package. We can also provide valuable assistance in the preparation and presentation of your Statement of Hardship, which plays an absolutely essential part in your request for better terms.
Most Mortgage Lenders will accept your Loan Modification Proposal by Fax, or Email with the documents attached in PDF (or preferred format) and with a properly prepared and presented document package, you can expect to be notified of your lender's decision within 3 to 4 weeks.

  • Your faxed document includes a cover sheet from your name, address and phone number
  • The first page of your documents package contains a list of all of the documents included with your proposal
  • A Lender's Checklist page for confirming that you've submitted all of the required documents
  • Your written proposal detailing your reason for claiming hardship, and how you can afford to keep your home under better terms
  • Lender Income/Expense and Asset/Liability worksheets
  • If self-employed, your current Profit & Loss Report, which we will be copied to Quickbooks
  • Lender Financial Hardship checklist
  • IRS Form 4506-T

In addition to the concise documentation we provide in our standard package plan, we can further strengthen your case by including a professionally written and composed letter of hardship, and additional supporting documents including:

Letter of Hardship

Lender Specific Financial Statement

Request for Transcript of
Tax Return 4506-T

Fannie Mae 1021 HAMP Hardship Affidavit
(if applicable)

Freddie Mac 1126 Financial Statement (if applicable)

  • Current Mortgage Statements
  • Copies of all delinquency Notices of Default
  • Most recent tax returns
  • Last 2 months pay stubs
  • Last 2 months bank statements
  • Current profit & loss statements
    (if self employed)
  • Latest property tax statement
    (if not escrowed)
  • Proof of Insurance
    (if not escrowed)
  • Copy of your Driver's License
Our Loan Modification Documents have been NPV tested by the Nationwide Financial Group
Net present value: To determine if a particular mortgage will be modified, the servicer will perform a so-called net present value test. The test compares the expected cash flow that the loan would generate if it is modified with the expected cash flow it would generate if it isn't.
If the modified loan is expected to produce more cash flow for the mortgage holder, the servicer is to restructure the loan. Howard Glaser, a mortgage industry consultant and a U.S. Department of Housing and Urban Development official during the Clinton administration, called this component of the plan "clever," arguing that it would work to ensure broad participation. "When you apply the formula, the loans that are modified are the ones that are in the best economic interest of the investors to modify," Glaser says. "The federal subsidy for the payment on the modification…tips the scale toward modification as a better deal for the investor."
Online research at virtually any of the major news sources should be all that is needed to see the advantage that our superior service provides anyone that is serious about saving their home.
Foreclosure rates are steadily climbing throughout the U.S. as the number of people no longer able to make their monthly mortgage payments continues to increase at an alarming rate. But with no end to this recession in sight, and job growth apparently stalled for the foreseeable future, new hope has been found by many in the form of loan modification proposals, which allow borrowers to establish new and better terms with their mortgage companies. However, it is an arduous, and often infuriating process.

Watch as Congresswoman Maxine Waters attempts to assist a Los Angeles family in her District as they struggle with a system that seems designed to discourage anyone from establishing conducive relations with their lender.

Discover the shock in learning that the Better Business Bureau awards radical Islamic group Hamas a grade of A-, while a 5-Star Restaurant gets an F, giving testament to what many have known for quite some time now, and that is, the Better Business Bureau cannot be trusted as an honest and credible source of business information.

Watch as ABC Chief Investigative Correspondent Brian Ross exposes the Better Business Bureau's practice of selling their grades for profit.

What is Loan Modification?

A loan modification is exactly what the term implies. It is an agreement with your lender to modify the terms of your mortgage, including interest rate, monthly payment and term length. It is also possible to negotiate away missed payments, penalties, late fees and in some cases, the principal of the loan. All of this is done with the approval of the lender - allowing the homeowners to keep their home and make a more affordable monthly payment.

Won't I need legal assistance?

No. But in the same way an attorney presents evidence and testimony in court, a lot about your proposal's success is based upon its concise delivery of facts, the life pressing priority it represents to the borrower, with your "closing statement" being the positive effect it has on our economy.

How long will it take to get my loan modification proposal approved?

There is no exact answer. Generally, the process can take anywhere from a few weeks to several months. Most lenders will work quickly to approve a loan modification once they have been contacted and provided with a complete package to work on.

Are banks and Lenders really willing to do Loan Modifications?

YES! Homeowners need to know and understand that the lenders and banks DO NOT WANT YOUR HOME AS MUCH AS YOU DO NOT WANT THEM TO HAVE IT! There are very sizeable expenses incurred by the lenders and banks attempting to collect and then foreclose. In the current market the chances are very good that the loan amount is greater than what the banks can sell for. This is resulting in huge losses for the lenders and banks. The Loan Modification process helps them mitigate their losses. Please understand that it is in the best interest of the lender to get you back making regular payments because that is how they make their money. They usually will try and work something out and get you making payments again.

What Should I do when I get behind on my Mortgage?

A. Don't ignore the phone calls and letters from your lender. Take this matter very seriously and work to resolve the problem as quickly as possible. Keep track of all correspondence you receive for later reference.

B.Stay in your home. If your home is vacant, it can be seized. Foreclosure Timeline - Once you become 90 days past due the Mortgage Company will typically issue a NOD (notice of Default). After you receive this notice they will hire an attorney and begin the Foreclosure with the Court system. The Foreclosure must follow a strict procedure laid out by your State laws. Eventually the house will be sold at auction if nothing is done to stop the Foreclosure. These time frames are typical and may vary depending on your actual situation.

What is the difference between a Loan Modification and Refinancing?

A loan modification is preferable to refinancing primarily due to the cost to the homeowner. Refinancing costs average between 3% to 6% of the amount financed. For example, on a $150,000 mortgage, for example, the homeowner could pay between $4,500 to $9,000 in closing costs, attorney fees, points, appraisal fee, prepayment penalties of your current mortgage, and other costs associated with the type of mortgage you have. Additionally, you must meet credit check standards, FICO score requirements, and equity requirements. The time frame to complete refinancing is at least the same as your original loan, though (with the current mortgage industry constraints) it will probably take longer. With a loan modification, your only external cost would be a minimal processing fee from your current lender (between $200 to $500) and a title fee. However, many lenders do not charge any fees for a modification. Also, a loan modification does not take into consideration your credit score. The time frame to complete a modification can range between 30 days to 120 days depending on the lender's volume and the urgency of your situation (homes pending sale or in foreclosure are usually given a priority).

How do I qualify for a loan modification?

To qualify for a loan modification, the homeowner must have a source of steady income. In addition, the homeowner must be facing a current hardship. Other additional eligibility requirements may include:
  • Borrower is currently delinquent on mortgage (some programs will modify mortgages that are current)
  • Mortgages that are currently in foreclosure or pending sale
  • Borrower has suffered a decrease in income or increase in expenses
  • Short or long term financial difficulties
  • Medical expenses, death in the family or other emergencies
  • Little or no equity in the home preventing borrower from refinancing
  • Currently in an Option ARM or adjustable rate loan ready to reset
  • Currently in a high fixed rate loan

What qualifies as a hardship?

Have you experienced and unavoidable increase in expenses? How about loss of income? You will need to demonstrate that a hardship makes it difficult for you to meet your current monthly mortgage payments. A hardship can be defined as a recent increase in your interest rate, divorce or separation, death of a spouse, loss or reduction of income, illness, military service, and job relocation.Can I reduce my principal balance with a loan modification? While it is possible, it is not common for lenders to approve this loan modification. Except in extremely rare cases, lenders have generally not begun to offer homeowners principal reductions as of yet. There is some proposed legislation that may cause lenders to begin to do this in the near future.

What happens to the past due balance when I modify?

The past due balance or balance in arrears can be wiped out by the lender but most of the time it is added to the balance of the note and the new rate is calculated at the new balance. Some lenders require a percentage of the amount in arrears to be paid in order to start negotiations for loan modification. This seems to be going away due to the number of people in default at this time.

How does a loan modification affect my credit?

A loan modification does affect credit but only if the borrower has been late. The loan is brought current and is shown as such on the credit report. The new loan amount and payment will be reflected on all 3 bureaus and the loan will show paid as agreed. Successful on-time payments will cause the credit score to rise over time.

Do all lenders have the same modification rules?

All lenders have their own rules for loan modification as well as governmental programs that they can follow when helping homeowners across America. Some of the available programs are Making Home Affordable Modification and Refinance, FDIC, and Hope Now Guidelines. These guidelines can be found on the internet.

What happens if my request for modification is denied?

If a borrower's request for modification is denied the first thing to do is to find out why. Was there incomplete or inaccurate information? Was the negotiator overwhelmed or was there miscommunication? Communication and getting the right information is crucial. If there was missing information call and try to resubmit. If you are denied again, you may want to consider a deed in lieu of foreclosure or list the property and short sell if the balance is higher than the home's value.

Will the lender pay back taxes and HOA dues with a modification?

Most of the time lenders bring property taxes current in a loan modification. The IRS has the right to sell the property for back taxes owed causing all lien holders to lose their entire interest in the property. HOA dues are another issue and should be part of the negotiations but are not always brought current by the lender.

Is the interest I pay once modified still a tax deduction?

Yes, the note is simply modified and based on the current tax codes interest up to a certain amount is deductible from federal income tax. We advise meeting with your tax professional to verify the deduction and if you qualify.

Can a mortgagee include late charges in the Loan Modification?

Mortgagee Letter 2008-21 states that accrued late charges should be waived by the mortgagee at the time of the Loan Modification.

How do I prove to my bank that I will be able to make the new house payment if they place me in a loan modification program?

The lender wants to see an accounting of all of your monthly expenses and your monthly income. You must calculate your debt ratio so that your new housing expense (taxes, insurance and HOA included) do not exceed a certain percentage. This is where ADP's experience in the banking industry will prepare this information in your loan modification package.

Do you count the income of people living in the home that are not on the title?

Yes. We consider the total income of the household, not just the homeowner.

Do I need to be delinquent or behind on my mortgage?

No, you do not need to be behind on your mortgage to qualify for loan modification under the Home Affordable Modification Program. Responsible borrowers who are struggling to remain current on their mortgage payments are eligible if they are at risk of imminent default, for example, because their mortgage payment has recently increased to a level that is not affordable. If you have had or anticipate a significant increase in your mortgage payment or you have had a significant reduction in income or have experienced some other hardship that makes you unable to pay your mortgage, contact your servicer. You will be required to document your income and expenses and provide evidence of the hardship or change in your circumstances. There may be other modification programs designed to assist borrowers who are delinquent.

Do you have any preferred lenders?

No, we work with all lenders. The results will vary with each Lender depending on the specific details of your Lenders' guidelines and your hardship.

What disqualifies a client from a modification?

We cannot help people who have no source of income or have no proof of hardship.

Can you guarantee that I will be approved for a Loan Modification after completing your preliminary work?

No, each Mortgage Lender and Investor has their own specific guidelines that need to be met before they approve a loan modification.