If you received a HAMP loan modification in 2009-10, the interest rate on your mortgage may have or will soon reset to a higher rate. Under the terms of the HAMP program, the interest rate gradually resets, increasing by one percentage point annually until it reaches the market rate that was in effect at the time of the modification. For a $200,000 loan with a 40-year term, an interest rate increase from 2% to 3% would raise monthly mortgage payments by about $100.
If higher payments have caused you to fall behind on your mortgage or if you believe that you can't afford your new HAMP payment, you may be eligible to have your loan re-modified under Freddie Mac's new guidelines. You should reach out to your servicer – the company you make your mortgage payment to – today to make them aware of your hardship and learn about your options.
The payment on your HAMP modification will adjust after the first five years, so be prepared. Servicers are required to notify you of the rate increase four months before it becomes effective. This communication will also detail your payment change.
See how much your rate will increase or contact a professional housing counselor at 888-995-HOPE for more information.
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