HAMP Guidelines

Brighter tomorrow

LoanSafe Member
Hi: I was awarded (for lack of better term) a HAMP mod thru Wells Fargo. It is also a "step rate" where it increases over the next 8 years! To me, that sounds like an adjustable rate. By the 8th year I'm back to the payments I have now minus $100 unless I pay more as I go to bring down the principle. NACA says they can't do anything because it is an affordable loan now according to my financial statement. It looks right on paper but I'd be using one whole check to pay the mortgage so it doesn't work out in real time. I wanted a principle reduction based on the fact of predatory lending practices getting me in the "mell of a hess" in the first place. That didn't happen but I thought the HAMP program could allow that is my property was valued less than $7 hundred thousand something. I am in a townhouse (condo they call them in California) owe-ing $401,700. It got to this figure from about $250,00 before refinances. What is your suggestion for a better deal? Right now I am on the trial period where I make 3 consecutive payments ON TIME and then it goes into effect as a modification. I love my new payments of $1625, taxes included but they are not staying that way. The interest will stay at 4%.

Cat Damiano

Mortgage Wars
Brighter tomorrow,

If your HAMP payment is at 31percent of your gross income including Principal, Interest, Taxes, Insurance, and in your scenario, HOA dues, then that is the best payment from this program that you will receive.

According to HAMP:

6.3.4 Step 4—Principal Forbearance

If necessary, the servicer will provide for principal forbearance to achieve the target monthly
mortgage payment ratio. The principal forbearance amount is non-interest bearing and nonamortizing.
The amount of principal forbearance will result in a balloon payment fully due and payable upon
the earliest of the borrower’s transfer of the property, payoff of the interest bearing UPB, or at
maturity of the mortgage loan.

6.3.5 Principal Forgiveness

There is no requirement to forgive principal under HAMP.


LoanSafe Member
questions/ regarding loan modification

I need to get some answers. I was approve for a loan modification with Litton Loan really didn't take it down that much, but I was glad they did the loan modification. Now here come the issue, my motor went out my car and I didn't pay my last trial period. They received the payment too late.

Do anyone think I can get another loan modification done.
If they decide not to do another loan modification how long will it take for them to start foreclosure...

Cat Damiano

Mortgage Wars

I am going to assume that since you posted on the HAMP guidelines thread your trial was under HAMP in which case the guidelines state:

Borrowers who do not make current trial period payments are considered to have failed the trial
period and are not eligible for a permanent modification. For TPPs with effective dates on or after
June 1, 2010, “current” is defined as the borrower having made each trial period payment by the
last day of the month in which it is due.

Did they receive the trial payment in the month that it was due?

Brighter tomorrow

LoanSafe Member
Thank you so much for your response. It sounds like I may have the best as it will get. I'm in my home with an affordable payment.....for now. I will be grateful and worry about years from now...years from now:) Have a wonderful day.


LoanSafe Member
Question: I have a previous Countrywide now BofA Fannie Mae mortgage with PMI paid by lender {no HARP}. I have been trying to get a MHA modification since November of 2010. I am current as of this month. I was told that I was declined for the modification because I did not meet the criteria setup by lender {death, disability or divorce}. Also told I don't qualify for traditional because I am current. I will be forced to put it on a CC if I want to remain current next month and not destroy my credit. I was told this falls within the guidelines of Imminent Default.

I emailed the OOP {Barbara} at BofA and have been contacted by a customer advocate, Pighe Dawson. He doesn't have any real answers. He seems to only relay notes that are updated in my records.

I have contacted NACA and started that process. They said they will contact BofA and request a forbearance.

Ran CheckMyNPV.com and it calculated a forbearance, interest and payment reduction.

Does anyone have any ideas of where I can go from here or what I might be doing wrong?

Cat Damiano

Mortgage Wars


LoanSafe Member
Long story short: a friend of mine applied for HAMP in 2009 and was finally approved at the end of 2011. He had accepted employment overseas in order to produce the necessary income. When he received the HAMP trial offer, he found that the servicer (Chase) had increased his gross salary by 25%, for what they claimed was the inability to verify his YTD wages. He had been receiving handwritten pay checks that did not list YTD income. We sought advice from the HAMP Solution Center. They advised to make the trial payments so as not to be disqualified from the program, and to get a YTD statement of wages from the employer so the final mod payments could be adjusted. All that was done, and when he received the final modification in January, the payments were still calculated at 125% of his gross income (about a $400 difference in the new monthly payment). He refused to sign the modification agreement and appealed the calculation. Chase came back with (a) they reviewed it again and said they were justified in the 25% increase because he was not paying US taxes (he pays foreign taxes on income and has a Foreign Income Tax Exclusion on his return); and (b) they are considering the case closed and have advised he is ineligible for HAMP because he did not return the agreement timely. They are attempting to proceed with a short sale or deed-in-lieu of foreclosure. This is a Freddy Mac loan-- we have spoken with Freddie and the HAMP Solution Center and neither have provided any recourse. Any advice what to do now?


LoanSafe Member
On Time Payment Bonus, Reality or Fiction?

Hi Arezo,

The way the HAMP incentive works is:
13.2 Borrower Incentive Compensation
Borrowers whose monthly mortgage payment is reduced through HAMP by six percent or more
and who make timely monthly payments will earn an annual “pay for performance†principal
balance reduction payment equal to the lesser of:

$1,000 ($83.33/month); or

One-half of the reduction in the borrower’s annualized monthly payment for each month a
timely payment is made.

The “pay for performance†principal balance reduction payment will accrue for each month in
which the borrower makes current payments. The payment will be payable annually for each of
the first five years after the anniversary of the month in which the TPP Effective Date occurred as
long as the loan is in good standing and has not been paid in full at the time the incentive is paid.
For example, if the borrower is current and makes 10 out of 12 payments on time, he or she will
be credited for 10/12 of the annual incentive payment as long as the loan is in good standing at
the time the annual incentive is paid. A borrower whose loan is delinquent on a rolling 30- or 60-
day basis will not accrue annual incentive payments.

This payment will be paid to the mortgage servicer to be applied first towards reducing the
interest bearing UPB on the mortgage loan and then to any principal forbearance amount (if
applicable). Any applicable prepayment penalties on partial principal prepayments made by the
government must be waived. In the event the borrower is delinquent, but still in good standing,
the borrower’s incentive should continue to be applied as a curtailment to the interest-bearing

If the loan ceases to be in good standing or is paid in full, the borrower will forfeit any incentive
payments that have accrued but are unpaid and will cease to be eligible for any further incentive
payments after that time, even if the borrower subsequently cures his or her delinquency. With
respect to PRA, if a borrower loses good standing before the entire PRA Forbearance Amount
has been applied as principal reduction to the UPB, the unapplied PRA Forbearance Amount
shall remain as non-interest bearing principal forbearance for the remaining life of the loan.

“Pay for performance†principal balance reduction payments are excluded from gross income for
tax reporting purposes.
Have you ever seen Bank of America do this? It wouldnt be the first time BoA just refuses to follow the program as written. Let me explain.

I was 100% current but an early lay off victim after the banking collapse, watching my savings dwindle on my old monthly payments (based on A credit when I was employed at 5 3/8% Fixed for 30), literally a poster boy for this program as it was proposed.

I battled BofA tooth and nail from the day the Recovery Act was passed, for six months while they were waiting for the regs to be written, then another six months of misplaced duplicate run around stall tactics (all very well documented, even notes and quotes from every BS Customer Service Rep with direct contradictions and outright lies), finally receiving my official Welcome to HAMP Letter and trial payment plan on January 25, 2010, calling for the documents to be completed and returned and first trial payment to be made no later than March 1, 2010.

I FedEx them all the docs, literally the next day, Jan 21st, and made the first trial payment, due no later than 3/1 on 1/21/10, the second on 2/13, the third on 3/10 with 100% on time or early monthly "trial" payments each month as I put up with more well documented stalls and misinformation from their customer service reps on why 3 trial payments had already gone on for 4, then 5, then 6, then 7, then 8, and finally 9 months with no decision.

Finally, in Sept of 2010, after 9 mos of trial payments, they rejected my HAMP request on a form letter lie (that I dont qualify on the numbers, when I qualified when they put me on trial payments and nothing had changed) and the form letter listed a totally bogus phone number to contact them with questions or disputes, it was answered by the attendance office recorded line at some high school in Texas.

Over the next three weeks, they immediately barraged me with a notice almost every day, imposing back late fees, on balances caused by making less than the original payments per their instructions in the "trial period" (so a late balance and fees they manipulated me into because I was 100% current when I contacted them) and a demand to pay every penny that I was in arrears or they would accelerate/foreclose 10/29/2010. So they manipulated me into having a $5800 balance by saying I qualified for the program, stringing me along on trial payments longer than the govt prescribed 90 days, then falsely denied my application and inflated by balance with all the retroactively imposed late fees upon rejecting me and then demanding immediate payment in full to avoid immediate acceleration of the entire loan. If that isnt predatory lending, I dont know what is, maybe better described as PsychoPathic Lending!

Fortunately, when I got the bogus rejection letter with the wrong phone number, I contacted my US Senator's office, Kit Bond, since retired. It took a week or so to go thru the process of explaining what my situation was, getting them to understand and giving them some documentation to get them to believe me about what BofA was doing, then signing a privacy release so they could inquire on my behalf, but one phone call from their office and all of a sudden my permanent mod was approved on November 6th, with payments shrinking from $1200/mo to $800, at 2% for 34 years and 6 month term, just the way the program was intended/written, with all late fees eliminated.

It took me another 6 months and at least 20 calls to finally get them to rescind the negative credit reporting information per the govt rules. Of course, the first correction wasnt done correctly, leaving one month that tripped the whole credit report into "Late on Mortgage Status" and I had to get to the actual Mod Dept, with Cust Svc transferring you and then getting disconnected, before I could get that one last negative comment removed.

So, I have been making "OnTime" or even early modified payments, beginning with the first trial payment I made in Jan 2010 thru yesterday's, due 8/1/12, and have never seen a credit. I called them about it 4 or 5 months ago, I think Jan 2012 to inquire, and guess what, you have to talk to the Loan Mod Dept, I'll transfer you and then you hold for about 5 minutes before it disconnects with no answer. It brought back so many bad memories from the Mod Stuggle that I said to heck with it.

So, as you can tell, BofA, not following the rules is what I expect. Have you seen anybody actually get the incentive?

Cat Damiano

Mortgage Wars
Hi SteveinKC,

You are quoting a post of mine that was made a year ago, since then there have been three updated versions of the HAMP guidelines, but the incentive still remains the same, and yes, I have personally received the incentive for the first year of successful HAMP payments for a HAMP modification through Chase. In the success section of the forum there are others posting about their experience with BofA.

Have you tried to escalate your concerns to the executive team, if not, they can be reached here;


You can also contact MHA compliance here;



LoanSafe Member
Hi SteveinKC,

You are quoting a post of mine that was made a year ago, since then there have been three updated versions of the HAMP guidelines, but the incentive still remains the same, and yes, I have personally received the incentive for the first year of successful HAMP payments for a HAMP modification through Chase. In the success section of the forum there are others posting about their experience with BofA.

Have you tried to escalate your concerns to the executive team, if not, they can be reached here;


You can also contact MHA compliance here;

Just compiled data from monthly BofA statements, tracking my Balance on each one, the change and the payments made and confirmed there has been no incentive credited to my account or any reduction in the principal balance after 9 trial payments and 23 monthly payments since the permanent mod was approved Nov 6, 2010.

I am on hold with the "executive line" you gave me but they dont seem to know what I am talking about and are trying to get ahold of the HAMP department..... Ahh, memories of hours of on hold music! Thanks for your help though, your having actually seen the incentive payments is the only reason why I'm going thru this aggravation again but they should have reduced my balance by $1000 twice already which means I'm paying more interest (although small) than I should be too.

So far, everytime she has come back from extended hold, I am doing nothing but educating her about the program, reading her quotes from your year old post and she still has no idea what to do so back on hold......27 minutes so far on this call.

Her first answer was that my payment didnt decrease enough to qualify but my old monthly payment was 1180 and went down to 800/mo which is WAYYYY more than 6%! So after another 4 minutes on hold, she says she is putting in a "Service Request" to be assigned to someone else within 5 days for research and they will get back to me........and then have 15 more days to come to a resolution... yada yada yada

Thanks for your information, really, it educated me and as it turns out, Bank of America too, although my Blood Pressure is back up over 150 after the last 35 minutes! Memories of the Loan Mod Process all over again.

Cat Damiano

Mortgage Wars
The information about the incentive and how it would apply was written in the two page congratulations letter that was included with my HAMP documents under the section entitled BORROWER INCENTIVE.

Chase has also been including the incentive payments that are accruing in my monthly statements which has started over for the next twelve months of timely payments.


LoanSafe Member
I guess I am missing something and would like to get some clarification. I have been denied 4 times - I have an interest-only loan right now that will reset in Feb. Citimortgage is basing my HAMP denial on the fact that my current gross income exceeds my interest-only payment. I thought this whole time that they have to measure the gross income against the principal, interest and property taxes to determine if your mortgage payment was more than 31% of your income. I thought that was step 1. If they used the principal (which they tell me what it is on every statement), interest and property taxes against my gross income, my current mortgage payment then exceeds 31%. Hubby got disabled, so qualifying hardship. We had to file BK finally to stop foreclosure - not a lot of consumer debt. What am I missing? Thank you!

Cat Damiano

Mortgage Wars
HI caljules,

Welcome to the forum and thank you for joining...........

That would only apply to loans that are set to reset less than 120 days out. Since yours is more than that, the following would apply;

For ARM loans, including Pay Option Loans that are ARM loans and interest only ARM loans,
that have an interest rate reset scheduled more than 120 days after the date of the evaluation,
the monthly mortgage payment and interest rate used to determine eligibility will be the
borrower’s current scheduled monthly mortgage payment (which, in the case of Pay Option Loans
that are ARM loans, means the minimum payment required under the loan documents regardless
of which payment the borrower elected to pay in the prior period) and the note interest rate in
effect at the time of evaluation.

Here is the information for the loans that are resetting within the 120 days;

With respect to borrowers with adjustable rate mortgage (ARM) loans, including ARM loans that
provide for a monthly payment option (e.g., specified minimum payment, interest only payment,
40, 30 and/or 15 year fully amortizing payment) (Pay Option Loans) and interest only ARM loans,
that have an interest rate reset scheduled within 120 days after the date of the evaluation (Reset
ARM), the monthly mortgage payment used to determine eligibility will be the borrower’s fully
amortizing payment. The borrower’s fully amortizing payment is to be determined by using the
remaining term of the mortgage, the current unpaid principal balance (before capitalization) and
the reset rate. The reset rate is to be calculated by applying the index or formula that is in effect
as of the date of the evaluation, even if the reset rate would not take effect until a future date
and/or be calculated using a future index (Reset Interest Rate).


LoanSafe Member
Thank you so much for responding. This site is the best information I have found in the two years I have been fighting.

Wow - no one ever explained that to me - not the half a dozen free HUD counselors, not any of the dozens of homeowner support specialists from the mortgage company - even the first time I was "approved."

I am in a real tough spot because of all of this. I would really like your opinion, and others opinions, on what I should do. Two years ago, I was current on the mortgage but not on the property taxes - because like an idiot I did not escrow several years prior when we permed out our construction loan. My fault. I own that one. And then my husband starting having health issues, finally losing his job. I did call Citi and asked them what they could do to help me with the escrow issue - nothing, of course.

Then when HAMP came out, I called CitiMortgage and they said, OK - approved for HAMP and I was given a trial payment over the phone - there was none of this ARM reset thing. They said they would just pay the past due property taxes and put the past due property taxes on the back of the loan, and it would be "automatic" if I paid the trial payment for four months. I paid the trial payment on-time .... for eight months.

During that time, I was about to get laid off but then found a better job. So, when they went to "final approval" of the modification, I had a slight increase in salary, but a huge increase in commute expenses. So, they kicked me out of the program - no way to talk to anyone or update my expenses or anything.

And, here's the kicker: all my trial payments went toward the past due escrow, so when they kicked me out, it looked like I was eight months behind on my mortgage payment. They doubled my payment to finish paying the escrow - and of course started foreclosure. I had no choice but to file Chapter 13 BK to stop foreclosure. But the payment is so high due to the arrearages, that I can't afford both the mortgage and the BK payment - even though the Trustee thinks so.

My mortgage will reset in Feb. I pay 5.625% now. I will pay 2% above LIBOR, not to exceed 10%, not more than 1 point per year. I am deathly afraid that I will be in year 3 of the BK, interest rates will go back up, and I won't be able to refinance or get out of this mess because of the BK, and if I can't pay the mortgage and BK now, then I certainly won't be able to afford it later.

I understand FHA may take me in two years.... I just want a fixed rate so I can be assured that I can live for the next four years. We built our house. We want to keep it. My first is about $385k, and appraisals over the past two years have been hovering between $325k and $365k, to now the BPO Citi got said $400k. I am not sure what the appraisers were smoking that day!.

I have $44k left in my IRA. I can: A) take it all out and pay off the arrearage claim, or, B) just bite the bullet and live at the poverty level for the next four years. I got a lien strip on the second mortgage, so that goes away at the end of four years too. My attorney thinks I should just hang with it.

Thoughts? Should I even keep trying for the modification? If the loan resets and I am paying around 3-4% next year, then there is no way I will qualify. This really urks me because here I am: I make too much money for the program, not enough to get out of this mess that is partly due to Citi's irresponsibility, and have a house with a relatively solid value!

Why didn't they tell me all of this the first time I applied? Why did they approve me the first time - OVER THE PHONE WITH A TRIAL PAYMENT? That was just wrong. They didn't bother to tell me about the "foreclosure hardship" alternative that would have solved my problem two years prior to that!

Thoughts on what I should do?

Has anyone ever heard of that clause that says "if they don't meet qualifications but can benefit from a modification, the servicer should present that to Freddie Mac?" Heard of anyone with any luck with that? I certainly think I have a real hardship and could really benefit from a loan modification.

Thanks so much. I have really enjoyed reading the info on this website over the past few months.


LoanSafe Member
Sorry for the "War and Peace." I am really struggling with this decision. Also I meant that they had an escrow hardship that I could have utilized several years back, but which they neglected to tell me about. Thank you again.

Cat Damiano

Mortgage Wars
Unfortunately when HAMP was first implemented they were issuing everyone a trial payment over the phone and then doing the verification after so once verified, many were denied. The process now is much more streamlined and verification is done upfront prior to being given a trial plan. I wasn't able to garner from the lengthy post why you feel that you would be denied in February as well. I have explained in my post why you are being denied currently, but that doesn't mean that once the rate resets you will be denied at that time if you exhibit a hardship.


LoanSafe Member
Yea, that's what I heard too. That seems really unfair. Currently, interest only with escrow is $2,220. My gross "monthly" income is about $7,740 (that's when you include the two extra checks per year when there is five weeks in the month) * 31% = $2,399. My reset terms are 2% above LIBOR - currently projected to be about 1.06 in Feb. = my new interest rate in Feb. at 3.06% - or thereabouts, correct? Using that rate, and according to http://www.realestateabc.com, my new total payment is projected at $2,281 (property taxes are 3900/yr; insurance $900/yr, $383,500 originated in 2006). So, the way I figure it, my new payment will still be lower than 31% of my income.

Currently, my mortgage payment is $2,200 per month, and my BK payment is $1,250, of which $784 is first mortgage arrearages, and is projected to stay that way through 2016. It is really a cash flow issue I have two kids (one now in HS, the other not far behind) - there's nothing left after each paycheck - barely enough to cover basic expenses. And of course the extra paychecks that you get each year, seems to get spent on the big stuff like car repairs for my 1998 SAAB that is making a 114 mile roundtrip daily commute, or band instrument repair. So, my income is really not as high as it appears on paper. I have not been able to make the BK work since 2011 without siphoning out of my IRA. But, somehow, I didn't meet "imminent default" for Standard Mod. Geez, I just don't know what else I can say!

Someone from Citimortgage's Executive Response Team called me back to discuss my denial. I couldn't talk long, but I told her I was interested in working with them on an Exception - the part in the Standard Mod that says "if the borrrower doesn't meet the requirements, but servicer feels they can benefit, servicer can recommend..." The Executive Response lady said she had no idea what I was talking about. So, I will call her back this week.

Do you have any experience with the "Exception" proposals?

Thank you for your support.


LoanSafe Member
My goal, is to eliminate the first mortgage secured BK claim so I can lower the payment, and to fix the interest rate, which will stablize my payment since we are now a one-income family. My husband has been trying to help neighbors by being their go-between on their home improvement projects, so he can bring in a little bit here and there. Just not enough to be considerable income to sustain forever. My home value, without the second, is right there, so I know I am really close.

Cat Damiano

Mortgage Wars

When you are speaking about the exception on a standard modification, whos standard modification are you talking about? Is your loan backed by either Fannie Mae or Freddie Mac?

For Fannie Mae: 1-800-7FANNIE (8am to 8pm EST)

For Freddie Mac:
1-800-FREDDIE (8am to 8pm EST)