Home Affordable Modification Program highlights and resources

With Single-Family Seller/Servicer Guide (Guide) Bulletin 2009-6, issued on March 11, we announced detailed requirements for the Home Affordable Modification Program (HAMP), a new loan modification initiative in support of the federal Making Home Affordable Program.

This new loan modification program replaces the Streamlined Modification Program and offers a foreclosure prevention solution by expanding eligibility to current as well as delinquent borrowers.

Home Affordable Modification Program highlights

The Home Affordable Modification Program is available for mortgages originated on or prior to January 1, 2009, and will expire on December 31, 2012. The new program:

• Replaces the Streamlined Modification Program (SMP). Servicers must no longer solicit borrowers for a modification under SMP and instead must evaluate borrower eligibility for a modification under the new program.  Guide Bulletin 2009-6 provides instructions to Servicers with respect to mortgages in the SMP Trial Period or mortgages for which a solicitation offer or Workout Plan has been sent to a borrower.
• Seeks to reduce the monthly mortgage payment to as close to, but no less than 31 percent of the borrower's gross monthly household income.
• Requires HUD-approved credit counseling for borrowers with monthly total debt-to-income ratios equal to or greater than 55 percent.
• Provides incentives to borrowers and Servicers for successful modifications and ongoing timely payments.

We appreciate the extensive efforts of our Servicers to assist borrowers by implementing the HAMP. By working with borrowers through this program, we can work together to be a stabilizing force for the nation’s families and their communities.

Home Affordable Modification Program resources

• Visit Freddie Mac’s HAMP Web site for additional Servicer resources including a fact sheet and information on gaining access to secured HAMP tools.
• Read our Guide Bulletin 2009-6 for the requirements on how Servicers should implement, underwrite, and service eligible Freddie Mac-owned mortgages under the new HAMP.
• Visit our Learning Center for additional educational resources on the Home Affordable Modification Program. Training dates and times will be posted in the near future.
• Review Guide Exhibit A (Chapter C65, Home Affordable Modification Program) for even more detailed information about:
  • Borrower eligibility
  • The loan modification process
  • Solicitation and income documentation process
  • Required documentation, investor reporting and remitting, and modification performance tracking
  • Incentives for Servicers and borrowers
• Review federal Making Home Affordable Program consumer information on the U.S. Department of Treasury Web site.
• Visit the Federal Trade Commission's consumer protection Web page for valuable information on foreclosure rescue scams and other valuable consumer protection resources.