Over the past year, foreclosure rates have declined a bit. However, this does not mean that some homeowners aren’t still living with the risk of losing their houses due to inability to make their mortgage payments. The Obama HAMP program was designed to help at-risk property owners keep possession of their most important asset: their homes. The following will delve into what the plan can do for these folks to help them through a sticky financial problem that could cost them their beloved abodes.

Phoenix, AZ -- (SBWire) -- 12/04/2012 --In 2009, the Obama HAMP plan to help homeowners at risk of defaulting on their mortgages was developed. The anagram HAMP stands for home affordable modification program and its intention is to aid folks who are having financial difficulty by modifying, or changing, their original mortgage loan. The program can cut a mortgagee’s payment by as much as 40% by lowering the interest rate or lengthening the time he has to repay the loan. This sounded good in 2009 and still does today, but a few changes had to be made to qualify for the plan.

The Obama HAMP program of 2009 had strict guidelines: A homeowner had to reside on the premises he was requesting modification for, he had to owe a certain amount, and he had to have a job. If it was a second mortgage an individual was requesting assistance for, he was out of luck: the plan didn’t cover that then. Now, things are different. The property owner no longer has to live on premises, nor does he have to be employed. He does, however, still have to show that the property is not condemned. An applicant must be able to provide proof of financial hardship as well as of his ability to make the adjusted payments if the modification is approved. In 2009, his debt-to-income ratio had to be greater than 31%; now it can be less than that, which opens the door for many other people in jeopardy of losing their homes.

The Obama HAMP plan now can be applied to a second, or junior, mortgage. This part of the plan is called 2MP, and any homeowner facing foreclosure can request it. If an individual has had a HAMP modification previously but defaulted during the three-month trial period, he can reapply now and possibly be approved. Even if he is out of work, there’s a plan for that called UP, and it can reduce or defray a person’s mortgage for up to a year so he can seek employment.

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