Having Trouble Understanding How HARP Is Different From HAMP? Ask The Hoffman Law Group PA

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 1^st, 2009, and have a housing payment that exceeds 31% of your gross monthly income. You must also present a documentable financial hardship.

In either of these cases, you should also consult a professional attorney, such as the Hoffman Law Group PA, before making any major financial decisions. The Hoffman Law Group PA can advise you on which of these programs is best for you and can give you further guidance on other programs that you may not yet be aware of.