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                                                  FHA: HAMP FAQs Revised

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Overview

On May 20, 2009, the President signed the "Helping Families Save Their Homes Act of 2009."  This new law provided the Federal Housing Administration (FHA) with additional loss mitigation authority to assist FHA mortgagors under the Making Home Affordable Program (MHA).  

Mortgagee Letter 2009-23 announced the new FHA Loss Mitigation option, called the FHA-Home Affordable Modification Program (HAMP). The HAMP program was designed to provide homeowners in default a greater opportunity to reduce their mortgage payments to a sustainable level. 

The Mortgagee Letter became effective on August 15, 2009.

The new HAMP authority allowed the use of a partial claim up to 30 percent of the unpaid principal balance as of the date of default combined with a loan modification. The objective of FHA-HAMP has been to assist FHA mortgagors who are in default to modify their mortgage to an affordable payment. 

According to Mortgagee Letter 2000-05 and subsequent guidance, disposition options (pre-foreclosure sales and deeds-in lieu of foreclosure) are available immediately upon default, if the cause of the default is incurable (i.e., the borrower has no realistic opportunity to replace the lost income or reduce expenses sufficiently to meet the mortgage obligation).

On April 7, 2010, FHA notified of an update to its FAQs for the HAMP program with respect to the 30% deferral.
Highlights
 
FHA has updated page 15, question #4 of the Frequently Asked Question's (FAQ) for the FHA Home Affordable Modification Program (HAMP), the definition of what is included in the 30% deferral that is allowed on the FHA HAMP Partial Claim. 
  • The partial claim is to include both the number of installments and dollar amount of the previous partial claim in calculating the 30% deferral amount.
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FHA-Home Affordable Modification Program, and Subsequent Guidance (Questions and Answers: ML 09-23)

FAQs Update (04/07/10)
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