For many people who are finding it difficult or impossible to pay their mortgage, a new, lower monthly payment would solve their problem. However, the lender's loss mitigation departments can be difficult to work with through the modification process. An experienced law firm can assist you with the modification process by negotiating on your behalf and working to push the modification process forward. To discuss your situation, contact attorney James Ealley today at 410-535-2200 or jealley@jdelawfirm.com for a free consultation.

Making Home Affordable Options

There are many options available to homeowners experiencing difficulty in making their mortgage payments. Common causes of this financial struggle include loss of a job, a divorce, medical bills, death of a spouse and the failure of a business. The following provides an overview of the programs that are available.

Programs to Lower Your Payments:


Programs to Lower Your Interest:




Programs to Lower Your Payments


Home Affordable Modification Program (HAMP)

If you are employed, but struggling to make your mortgage payments, you may be eligible under the HAMP program to lower your monthly payments. The program is available to the following:

  • On a homeowner's primary residence
  • On a home that is rented or is intended to be rented by the owner
  • Homeowners who previously did not qualify for HAMP because their debt-to-income ratio was 31% or lower
  • Homeowners who previously received a HAMP trial period plan, but defaulted in their trial payments
  • Homeowners who previously received a HAMP permanent modification, but defaulted in their payments, therefore losing good standing

HAMP Eligibility Criteria:

  • You obtained your mortgage on or before January 1, 2009
  • You owe up to $729,750 on your primary residence or single unit rental property
  • You owe up to $934,200 on a 2-unit rental property; $1,129,250 on a 3-unit rental property; or $1,403,400 on a 4-unit rental property
  • The property has not been condemned
  • You have a financial hardship and are either delinquent or in danger of falling behind on your mortgage payments (non-owner occupants must be delinquent in order to qualify).
  • You have sufficient, documented income to support a modified payment.
  • You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.
Note: Not all mortgage servicers participate in the HAMP program, however, they may have alternatives available.
Back to Top

Principal Reduction Alternative (PRA)

If you home is worth a great deal less than it is worth, the Principal Reduction Alternative is designed to encourage lenders to reduce the principal balance on your mortgage.

You may be eligible for PRA if:

  • Your mortgage is not owned or guaranteed by Fannie Mae or Freddie Mac.
  • You owe more than your home is worth.
  • You occupy the house as your primary residence.
  • You obtained your mortgage on or before January 1, 2009.
  • Your mortgage payment is more than 31 percent of your gross (pre-tax) monthly income.
  • You owe up to $729,750 on your 1st mortgage.
  • You have a financial hardship and are either delinquent or in danger of falling behind.
  • You have sufficient, documented income to support the modified payment.
  • You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.

Over 100 lenders participate in this program, including Bank of America, JP Morgan Chase, Wells Fargo and CitiMortgage.
Back to Top

Second Lien Modification Program (2MP)

If your first mortgage has been permanently modified under the HAMP program, and you have a second mortgage, you may be able to qualify for a principal reduction or modification on your second mortgage. The 2MP program works in coordination with HAMP to achieve long-term affordability for homeowners.

You may be eligible for 2MP if you meet all of the following criteria:

  • Your first mortgage was modified under HAMP.
  • You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.
  • You have not missed three consecutive monthly payments on your HAMP modification.

The following servicers participate in 2MP: Bank of America, NA, BayviewLoan Servicing, LLC, CitiMortgage, Inc., Community Credit Union of Florida, GMAC Mortgage, LLC, Green Tree Servicing LLC, iServeResidential Lending, LLC, iServeServicing, Inc., J.P.MorganChase Bank, NA, NationstarMortgage LLC, OneWestBank, PennyMacLoan Services, LLC, PNC Bank, National Association, PNC Mortgage, Residential Credit Solutions, ServisOne Inc., dbaBSI Financial Services, Inc., Wells Fargo Bank, NA.
Back to Top

FHA Home Affordable Modification Program (FHA-HAMP)

Mortgage modification programs for homeowners in need are available through FHA, VA and USDA. The programs are designed to lower monthly mortgage payment to no more than 31 percent of the homeowner's verified monthly gross (pre-tax) income. If you have a loan that is insured or guaranteed by the Federal Housing Administration (FHA), you may be eligible for a program offered through that government agency.
Back to Top


USDA's Special Loan Servicing

Mortgage modification programs for rural homeowners in need are available through FHA, VA and USDA. The programs are designed to lower monthly mortgage payment to no more than 31 percent of the homeowner's verified monthly gross (pre-tax) income. If you have a loan that is guaranteed by the United States Department of Agriculture's (USDA) Section 502 Single Family Housing Guaranteed Loan Program, you may be eligible for a program through that government agency.
Back to Top


Veteran's Affairs Home Affordable Modification (VA-HAMP)

Mortgage modification programs for rural homeowners in need are available through FHA, VA and USDA. The programs are designed to lower monthly mortgage payment to no more than 31 percent of the homeowner's verified monthly gross (pre-tax) income. If you have a loan that is insured or guaranteed by the Department of Veterans Affairs (VA), you may be eligible for a program through that government agency.
Back to Top



Programs to Lower Your Interest


Home Affordable Refinance Program (HARP)

For homeowners who are not behind on their mortgage, but are experiencing a difficult time qualifying for traditional refinancing because you owe more on your house than it is worth, you may be eligible to refinance through the Home Affordable Refinance Program (HARP). HARP is designed to help you get a new, more affordable, more stable mortgage. HARP refinance loans require a loan application and underwriting process, and refinance fees will apply.

You may be eligible for HARP if you meet all of the following criteria:

  • The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
  • The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  • The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
  • The current loan-to-value (LTV) ratio must be greater than 80%.
  • The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months.

Note: Freddie Mac and Freddie Mae have somewhat different eligibility criteria.

Note: Not all mortgage servicers participate in HARP.
Back to Top

FHA Refinance for Borrowers with Negative Equity (FHA Short Refinance)

If you are current on your mortgage payments, but your home is worth less than what you owe, you may be able to refinance under the FHA Short Refinance program This type of refinance will put you into a more affordable, more stable FHA-insured mortgage. If your current lender agrees to participate in this refinance, they will be required to reduce the amount you owe on your first mortgage to no more than 97.75 percent of your home's current value.

You may be eligible for FHA Short Refinance if you meet the following criteria:

  • Your mortgage is not owned or guaranteed by FHA, VA or USDA.
  • You owe more than your home is worth.
  • You are current on your mortgage payments.
  • You occupy the house as your primary residence.
  • You are eligible for the new loan under standard FHA underwriting requirements.
  • Your total debt does not exceed 50 percent of your monthly gross income.
  • You must not have been convicted within the last 10 years of felony larceny, theft, fraud, forgery, money
  • laundering or tax evasion in connection with a mortgage or real estate transaction.

Back to Top


Tel: 410-535-2200 | Mail: jealley@jdelawfirm.com