125% Underwater will disqualify you for HAMP modification?

[Hard Times]

Question: Under the HAMP modification guidelines, it appears that initially only homeowners were not more than 105% underwater with their loans would even qualify. Now I read in this forum that that was raised to 125%.

So, should any of us who are more than 125% underwater in our loans not even try applying under the HAMP program? Has anyone received a trial mod who were more than 125% underwater?

My opinion is that the banks can pull numbers out of their hat to get almost anyone past this 125% mark, and use it as a reason to "reject" our applications. For example, Chase has an extremely low current value on my home which puts it about 150% underwater.....but I know that the current market will bring a price which is only about 110% underwater.

Are any HAMP applicants getting rejected by Chase (or other banks) because they "claim" you are more than 125% underwater?

Thanks for all replies.

[Hard Times]

Will someone please respond to this important question?????
thanks.

[MAXIE19]

Hard Times:

It appears you are confusing HARP with HAMP.

Under the Making Home Affordable program (MHA), there are two components or possible solutions. There is the Home Affordable Refinance Program or HARP and there is the Home Affordable Modification Program also known as HAMP.

Here are the eligibility requirements for the refinance program:

You may be eligible if:

• The loan on your property is owned or guaranteed by Fannie Mae or Freddie Mac
• At the time you apply, you are current on your mortgage payments ("current" generally means that you have not been more than 30 days late on your mortgage payment in the last 12 months, or, if you have had the loan for less than 12 months, you have never missed a payment);
• The amount you owe on your first lien mortgage does not exceed 125 percent of the current market value of your property;
• You have a reasonable ability to pay the new mortgage payments; and
• The refinance improves the long term affordability or stability of your loan.

Here are the eligibility requirements for the modification program.
To apply for a modification under HAMP, you must:

• Be the owner-occupant of a one to four unit home;
• Have an unpaid principal balance that is equal to or less than:
  • 1 Unit: $729,750
  • 2 Units: $934,200
  • 3 Units: $1,129,250
  • 4 Units: $1,403,400;
• Have a first lien mortgage that was originated on or before January 1, 2009;
• Have a monthly mortgage payment (including taxes, insurance, and home owners association dues) greater than 31 percent of your monthly gross (pre-tax) income; and
• Have a mortgage payment that is not affordable due to a financial hardship that can be documented.

As you can see the 125% limit only applies to the refinance program and not the modification program.

Is your question about HARP or HAMP?

[Hard Times]

Maxie.....Thank you so much for clearing that up........what a relief!!! I was worried that they would not accept my HAMP mod if I was more than 125% underwater.

I learned tonight that others have been accepted for the trial mod who are even deeper underwater than I am, and who are paying even a higher percentage of their income toward the mortgage than I am. So, there is still hope for me.

Thanks again.

[cmarquesjr]

i owe over 480000 on my house that is worth around 240000 according to LA TIMES DATAQUICK, thank god HAMP does not count toward the percentage's that the HARP does.

[Hard Times]

Cmarque.......Yes, you are so right. I was worried at first thinking that the HAMP also had that 125% restriction.

Still hoping these underwater Underwriters will contact me and say I am approved for the trial mod. I cant get my "new" contact to even return my phone calls......so frustrating.