Home Affordable Modification Program Changes

The Home Affordable Modification Program (also known as HAMP), which has helped almost one million homeowners adjust their mortgage loans permanently since it was enacted, will now be extended by the federal government until December 31, 2013.

This extension sees the program add an additional year to its aid in order to better aid struggling homeowners as well as renters. An extension is not the only adjustment that was made to the program when the adjustments were announced Friday.

Also included was an adjustment for principal reductions and the tripling of incentives to investors in order to encourage those investors to agree to principal restructuring. This adjustment is not extended to Fannie Mae and Freddie Mac, and indeed the Federal Housing Finance Agency has prohibited the two companies from employing the principal reducing option for their borrowers.

Other changes in HAMP include assistance to those borrowers that are struggling with debt beyond just being underwater on his or her mortgage payments. Those struggling with debt such as medical bills and second-liens for example will be eligible for a separate evaluation with more flexible debt-to-income criteria and eligibility of the program will be extended to include investor owned properties currently occupied by a tenant and those vacant awaiting a renter.

Analysts believe that adjustments to HAMP, along with many other positive signs, show a recovery of the housing market in Encinitas and around the country. Encinitas Realtor Linda Moore can guide you through the process of selling or buying a home in Encinitas during this crucial time in the housing market.

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