Obama Loan Modification (HAMP) What is the Obama Loan Modification or HAMP Program

The downturn in the economy has placed many homeowners in a perilous situation. In choosing their mortgage, it appears that most took into account their earning power with an expectation that their earning power would keep pace with or even exceed growth in inflation and credit. Of course, the value of the home and the establishment of that home as a real financial asset were also considered. Now, for some, much of that has been turned upside down. Incomes have fallen or sometimes disappeared. The value of the home, once counted on as a great financial asset, has gone down dramatically. Some mortgage holders even find that they owe more on the home than what the home is worth in the current market.

Credit-yogi.com understands this combination of changing economic conditions and loss of income has placed many people in jeopardy of defaulting on mortgages. One way to handle that situation is to allow credit-yogi to help you pursue a loan modification program that can bring the current monthly mortgage payments down to a manageable size.

The risk of foreclosure must be managed carefully. As the number of foreclosures rose dramatically, the government stepped in to help.

The so called Obama home affordable mortgage program was introduced. This program is officially named the Home Affordable Modification Program, or HAMP. The primary thrust of this program is to help homeowners to avoid foreclosure.


By obtaining a HAMP modification, both you and the lender will receive real benefits. For the borrower:

  • Reduced monthly payments
  • Probable avoidance of foreclosure
  • Restructuring of late fees
  • Possible reduction of principal, interest rate, or both

For the lender:

  • Full repayment of the loan over time.
  • Avoidance of the expense of foreclosing and reselling, almost always at a loss to the lender
  • Government assistance funds to encourage lender participation in the program

It should be noted that the lending institution is not required to participate in the HAMP modification program. However, the government has made it quite financially attractive for the lender to participate.


In order to qualify for the HAMP program, you must begin by assessing your personal worth. You will need to show why paying the mortgage has become a hardship. Be prepared to list all sources of income, with back up documentation as to why your income has fallen. You will be required to file an affidavit explaining the reason for the hardship. Total loss of job taking income to zero will not be well received. Be prepared to show that you are trying to get or are getting at least some replacement income. Reveal all of your assets on the application. Also list all outstanding obligations such as credit card debt and car loans, along with the payment terms of those obligations. All of these things credit-yogi representatives can help you put in order.

You must show that you are both the owner and occupant of the house. This is to discourage real estate speculators who buy and sell homes that they do not live in. You must show that your mortgage took effect before January 1, 2009. Also be prepared to show that you owe not more than $729,750 on the mortgage. If you do not meet these criteria there are similar programs available.

Finally, you must show that your mortgage payment exceeds 31 percent of your gross monthly income.


A successful outcome of the Obama HAMP process will go as follows:

  • The lender will immediately reduce the interest rate on the loan so that your mortgage payments represent 38 percent of your gross income.
  • The government will provide dollar for dollar matches to the lender to reduce the principal, the interest, or both, to bring your mortgage payment down to 31 percent of your gross income.
  • You will enter a modified mortgage that will start with a trial period. You must successfully make your first three mortgage payments to make the new mortgage official. A successful completion of this trial period will entitle the lender to government rewards.
  • The government will pay down $1000 per year of the principal for up to five years so long as you continue to successfully make mortgage payments.

This is truly a win-win proposition. You should seriously consider it if you think you might be eligible. Because the criteria for proof and documentation are strict, a HAMP loan modification professional may be your best bet. And as always, the sooner you act the better.

Request a Call Back

First Name           Last Name Interest : Phone :
SSL Certificates