Since the housing market crashed in 2008, many homeowners
have struggled to keep up with their monthly mortgage payments. This has
resulted in a record-high of foreclosures in recent years that the Hoffman Law
Group PA has fought vigorously to prevent.
HARP vs. HAMP
Fortunately, many government-funded programs are available
that allow homeowners to refinance their loans even they are denied by lending
agencies. Two of the most popular programs include HARP and HAMP. The
differences between these programs vary, however, and homeowners need to know
what each program is designed for so that they can choose the correct program
for their specific circumstances. The Hoffman Law Group PA can advise you on
these matters.
HARP Explained
HARP, the most popular program, stands for Home Affordable
Refinance Program and is a program sponsored by Fannie Mae and Freddie Mac that
allows for homeowners to refinance their mortgage to the lowest possible rates
if their mortgage is higher than the value of their home.
With a HARP loan, you do not need to be facing foreclosure
or even a financial hardship. To qualify for a HARP loan, you will need to have
a mortgage on a one-to-four unit home that is owned by Fannie Mae or Freddie
Mac, have no late mortgage payments in the last 12 months, and owe no more than
125% on the value of your home.
HAMP Explained
HAMP, on the other hand, stands for the Home Affordable
Modification Program, and is sponsored by the federal
government. HAMP allows homeowners to avoid foreclosure by refinancing their
loan through a subsidized program even if a lending agency has previously
denied you for a loan modification.
To qualify for a HAMP loan, you must use the home as your
primary residence, have a mortgage less than $729,750, have received your mortgage
before January 1st, 2009, and have a housing payment that exceeds
31% of your gross monthly income. You must also present a documentable
financial hardship.
