Eligible borrowers in good standing for six years on Freddie Mac loans modified under the 2009 Home Affordable Modification Program (HAMP) will soon start receiving invitations to apply for a $5,000 lump sum payment from the Treasury to reduce the balance of their mortgages.
A new Freddie Mac bulletin gives mortgage servicers detailed directions for notifying eligible HAMP borrowers about the $5000 incentive payment and sending the necessary forms for borrowers to fill out return to the servicer.
Borrowers must return the forms by September 1, 2015 or the date of their HAMP Trial Period Plan's sixth anniversary, whichever is later. To qualify for the payment, borrowers must be in good standing on that sixth HAMP anniversary date. The payment will be automatically applied to the borrower's outstanding mortgage balances.
Freddie Mac has modified more than one million mortgages under a number of programs since 2009, including HAMP. HAMP was deployed by the Obama Administration to reduce the borrower's monthly mortgage payments to 31% of gross monthly income through a combination of interest rate reductions, term extensions, and principal forbearance. Freddie Mac estimates HAMP is saving the average borrower $6,372 per year.
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