Confused about the HAMP 2011 formula for debt ratio on your loan modification application?  This is one of the most critical aspects of applying and qualify for a loan workout-however most homeowners do not understand the formula that the bank uses.  Here is a brief explanation of what your lender will be looking for on your application paperwork.

HAMP FORMULA 2011 DEBT RATIO EXPLANATION

1. The first approval requirement is that your CURRENT debt ratio be higher than 31%-this means that your total monthly housing expense, your mortgage payment, property taxes, insurance and HOA dues, all together exceed 31% of your gross monthly household income.  The reason for this guidelines is that the new modified target payment will equal that percentage, so if your current payment is already lower than that figure, the loan mod won’t help you.  There is no published maximum percentage for your current debt ratio.

2. There is also a back end debt ratio, this is the total of ALL of your monthly expenses (not just your mortgage) divided by your household gross monthly income.  This shows the bank that you simply cannot make ends meet each month and are in a financial hardship situation that qualifies you for help.  There is no maximum percentage under the HAMP 2011 formula, but you must have enough monthly income to be able to afford the new mortgage payment and have some disposable cash left over each month .

3. Your debt ratio after the loan mod needs to equal 31% for your mortgage payment, property taxes, insurance and any HOA dues.  If the bank cannot use the Waterfall Method to reach this percentage, then you will be turned down.  This usually happens if you do not have enough monthly gross income on your application.

How can you be certain that your current debt ratio is acceptable and that your income passes the Waterfall Method of Modification?  You can use a system designed

Exact Requirements

specifically to help borrowers figure all this out-the loan modification calculator will instantly compute and display your own specific debt ratio, cash flow, and new target payment for you.  You will also see of you need to adjust your budget to pass the requirements.  Be sure to use the loan mod calculator before you submit your paperwork for review so you don’t make any mistakes.

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Find out if your debt ratio passes the HAMP 2011 requirements-use the #1 selling system for homeowners-The Complete Loan Modification Guide kit and loan mod calculator.  This powerful program will instantly show your own specific income, expense and asset requirements so that you can prepare your application correctly.  Visit MyLoanModificationCenter.com today for more information and get started now.

2011 HAMP Guidelines

The federal loan modification program uses the HAMP formula and 2011 updates to the program guidelines are important to know if you hope to get approved.  Most borrowers who are struggling with their high mortgage payments do not understand just what the rules for approval actually are.  In fact, the reason the majority of borrowers are turned down is because they did not prepare their application correctly.

Once you know the rules for approval you will be able to present your application so that it has the best chance of fitting into the HAMP formula.  There are some updates for 2011 that are meant to make it easier for homeowners to qualify for a loan modification.  Here are some basic, but important things to remember when you apply for a HAMP loan mod with your bank.

1. The guidelines and rules for approval are based on a formula that uses the homeowners financial information-monthly income, monthly expenses, assets and the current mortgage balance and payment are all used in this formula.
2. You may need to adjust your own budget to fit into the guidelines for approval.  For example, if your monthly income is too low then you will be turned down.  You can double check your own budget with be acceptable by running your figures through the loan modification calculator, a system developed specifically to assist homeowners who wish to apply for a loan workout.
3. HAMP 2011 requires less paperwork now-you need to complete the official application form, called the RMA, and provide copies of your most recent paycheck
   

   Exact Requirements

   stubs.  Self employed borrowers must provide at least 3 months bank statements and a P & L.   You may also be asked to sign a couple of forms-a 4506T and a Dodd Frank Certification (provided by your lender)

The rules for approval don’t have to be a mystery-you can actually use the very same formula the bank will use so that you can prepare your application correctly.  Just make sure that you verify your own monthly income, monthly expenses and assets are fit perfectly into the HAMP formula so that you have the very best shot at success.

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Get the real answers and real help you need-use the #1 selling resource designed just for homeowners.  The Complete Loan Modification Guide kit and Loan Mod Calculator instantly and automatically compute and display your own specific budget requirements so that you can complete your RMA correctly.  Avoid mistakes, get it right the first time.  Visit MyLoanModificationCenter.com today.

2011 HAMP Guidelines

When homeowners apply for a HAMP loan modification, most of the time they are just guessing at what their bank really needs to see from them in order to qualify.  Although the Federal Treasury Department set up the program with standard guidelines that all participating banks follow, when it comes to completing the application form, many borrowers are simply lost.

How can you figure out exactly what to put on your HAMP loan modification application so that you have the best shot at approval?  Well, don’t count on your lender to help you out very much-they will not explain the exact requirements for your specific situation-meaning just how you need to complete the financial worksheet to show the acceptable amount of monthly income, monthly expenses and your assets.

How important is it to understand the HAMP guidelines for approval before you submit your paperwork?  This can be the difference between approval or denial!  Here is what you need to know:

1. How much monthly household income will be required for you to qualify for a HAMP loan workout
2. How to list your monthly household expenses so that you pass the underwriting
3. Listing your assets correctly so that you pass the approval criteria for bank balances, items like checking accounts, savings, CD’s, money market accounts will be verified

Exact Requirements

The HAMP guideline requirement for monthly income is tricky for homeowners to figure out because if you show the bank too much income or too little income you will not qualify.  The trick is to find out just how much required so that you can complete your application correctly to pass the guidelines.  Homeowners can use the loan modification calculator to compute and display the exact amount of income to show, this system was specifically designed to help borrowers complete their HAMP paperwork correctly.

Keep in mind that all lenders use the same HAMP guidelines and income requirements when they analyze a homeowner for eligibility.  Once you know just what those guidelines actually are, you will be able to fine tune your own application so that the income, expenses and assets will be exactly what the bank needs to see in order to approve your loan modification.

Get the real answers you need-use the #1 selling system for homeowners, The

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Complete Loan Modification Guide kit and loan mod calculator.  This powerful program will compute and automatically display your specific budget requirements for you-then use this information to complete your HAMP application correctly.  Visit MyLoanModificationCenter.com.

2011 HAMP Guidelines

There is a lot of confusion out there about the debt ratio guideline for HAMP loan modification.  This is one of the major qualifying triggers that you must pass if you hope to get approved, so it is important to understand how the 31% debt ratio works for qualifying purposes.

The federal Treasury Department set up standard guidelines that all banks use when reviewing homeowners for HAMP loan modification eligibility.  One of those guidelines is that you must be facing a financial hardship situation and that your current mortgage payment is unaffordable.  The way that the lenders decide that your payment is too high now is to use this debt ratio formula.

HAMP DEBT RATIO FORMULA-31% CALCULATION EXPLANATION

Debt Ratio Calculation

1. This approval trigger refers to your Current Mortgage Payment-and requires that your total monthly mortgage expenses (payment, taxes, insurance and any HOA dues) be higher than 31% of the household gross monthly income.  If your current mortgage expenses are already less than 31%, then you may not be a good candidate for loan modification.
   
2. As long as your current mortgage expenses exceed 31% of your gross monthly income, then you pass the first trigger for HAMP debt ratio.
3. Now, your mortgage must be able to be modified using the Waterfall Method to arrive at a new monthly mortgage expense that equals 31% of your gross monthly income.  This new payment is called the Target Payment, and that is the figure that HAMP feels is affordable for homeowners.
4. The Waterfall Method uses your gross monthly income, your current mortgage balance and current property taxes, homeowners insurance and any HOA dues to determine what the new terms of your mortgage could be.  The interest rate can be reduced to 2%, the term extended to 40 years and finally the loan balance may be reduced to achieve the new 31% target payment.
5. If your monthly income is too low, then you will not pass the Waterfall Method and you will be turned down because your loan could not be modified to reach the target payment. If your income is too high, you will fail the initial 31% guideline.

Exact Requirements

It is critical to know ahead of time if your monthly income will pass the 31% debt ratio trigger and if your income is enough to pass the Waterfall Method to reach the new lower target payment.  You can find out your specific income requirements by using a system designed specifically for homeowners, the loan modification calculator.  This program will automatically compute and display PASS or FAIL for the debt ratio and Waterfall Method, and show you how much income you need to qualify.

Don’t be confused-get the real answers you need-use the #1 selling system for homeowners-The Complete Loan Modification Guide kit and Loan Mod Calculator.  Designed specifically to help borrowers apply for HAMP, the

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program will instantly give you specific income, expenses and asset requirements and help you avoid mistakes.  Visit MyLoanModificationCenter.com today for more information.

If you have been denied a HAMP loan modification and the reason given is Negative NPV Result, there are some important actions you can take to legally fight back.  Most homeowners have no idea what NPV means or how it affects their chances of getting a loan mod.  The government program has set up standard procedures that lenders must follow and standard options available to borrowers who find themselves up against the NPV calculation.

HAMP Loan Modification-Negative NPV Result Information

When a borrower is not approved for a loan workout because the transaction is NPV Negative, the borrower will have 30 calendar days from the date of the Non-Approval Notice to submit written evidence to the servicer that one or more of the NPV input values is inaccurate.  If the borrower wishes to dispute more than one NPV input, the written evidence for each input being disputed must be provided to the servicer at the same time.  If the borrower identifies material inaccuracies in the NPV input values, the servicer may not conduct a foreclosure sale until the inaccuracies are reconciled.

If the evidence submitted by the borrower is valid and material to the NPV outcome, the servicer must perform the NPV calcualation with the corrected input values.

HOW TO DISPUTE NPV

How to Dispute

In the event a borrower disputes the property value input as well as other NPV Data Input Fields and Values, the servicer may elect to validate the other disputed NPV Data Input Fields and Values and perform the NPV re-evaluation changing any other validated inputs while holding the original property value constant.  If this re-evaluation renders a positive NPV result, the servicer may APPROVE the borrower without performing an NPV re-evaluation with a new property value or obtaining a new appraisal.  If this re-evaluation renders a negative NPV result, the servicer must perform the preliminary NPV re-evaluation with the borrower’s estimate of property value.

If a borrower submits written evidence for some but not all of the NPV inputs that the borrower is disputing, the service must notify the borrower promptly that all the necessary written evidence has not been received and that it must be received within 30 calendar days.  This notification need not be in writing but must be documented, the servicer may extend the 30 calendar day dispute period to allow the borrower time to send the missing evidence.

The number one reason for NPV denial on a HAMP loan modification is that the lender has a higher current market value for the property.  You can dispute their valuation by providing an appraisal, CMA or BPO – ask your local Realtor to help you with this.  When trying for a loan mod, the lower your property value, the better your chances are!

Another common reason for NPV denial is due to the borrower not showing enough gross monthly income on their application.  If the income is too low, then the mortgage cannot be modified within the Waterfall

Pass or Fail-Calculated Automatically

Method, and the bank will determine that foreclosure is a better option.  How can you know ahead of time just how much income you need to qualify for HAMP?  You can avoid mistakes and verify your income, expenses and assets will work by using the loan modification calculator.  This powerful tool will instantly compute and display whether your budget is passing or failing, and you can make the necessary adjustments before sending it in for review.

Get the real answers and real help you need to qualify for HAMP loan modification.  Use the #1 best selling resource for homeowners, The Complete Loan Modification Guide kit and Loan Mod Quick APP calculator.

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This easy to use program provides you with the detailed information you need-the loan mod calculator instantly generates your very own monthly budget, showing you income, expense and asset requirements.  Get started today, visit MyLoanModificationCenter.com.

When you apply for a HAMP loan modification, you will need to list any other properties you own and also show any rental income you receive.  The qualifications used to determine how to list this income is important to know, because this income will also be used in determining your eligibility for the loan mod program.

HAMP Loan Modification Rental Income Guidelines:

1. Borrowers who receive rental income must provide evidence of that income, which is generally documented on the IRS Schedule E on the borrower’s tax return for the most recent tax year.
2. When the Schedule E is not available to document rental income because the property was not previously rented, servicers may accept a current lease agreement and bank statements or cancelled rent checks.
3. If the borrower is using income from the rental of  a portion of the borrower’s principal residence, the income must be calculated at 75% of the monthly gross rental income, with the remaining 25% considered vacancy loss and maintenance expenses.
4. If the borrower is using rental income from properties other than the borrowers principal residence, the income to be calculated for HAMP loan mod purposes should be 75% of the monthly gross rental
   

   Income Requirements

   income, reduced by the monthly debt service on the property (principal, interest, taxes, insurance, including mortgage insurance and associates fees) if application.

5. Rental income should not be included in a borrower’s monthly gross income if there is currently no income due to vacancy (even if the rental income was identified on the tax return or tax transcript).  The servicer must reconcile any differences between what the borrower communicates and the borrower’s information.  For example, the servicer might choose to perform a property inspection of the rental property.

Homeowners who want to have the very best chance at qualifying for a HAMP loan modification need to understand how to complete their application correctly-and especially how to list their monthly income, monthly expenses and assets on the financial worksheet.  This information is used by the banks to determine who will qualify, so if you put down too much or too little income, you could be instantly turned down!

Income, Expenses, Assets Calculated

It can be confusing and tricky to know just what the bank is looking for, but you can avoid mistakes by running your own figures through the loan modification calculator ahead of time-you will see immediately if you are passing or failing, and where you need to make adjustments to your budget figures.

Get the real answers you need to help you qualify for a HAMP loan mod-use the #1 best selling resource for homeowners, The Complete Loan Modification Guide

kit and Loan Mod Quick APP calculator.  This powerful tool provides you with the information you need-the loan mod calculator automatically generates your very own financial worksheet-showing you the monthly income, monthly expenses and assets required to meet the guidelines.  Visit MyLoanModificationCenter.com and get started today.

Homeowners facing financial hardship and trying to find a way to save their home from foreclosure may be eligible for a HAMP loan modification.  However, very often borrowers are so buried in debt that the option of filing a bankruptcy proceeding may be considered.  However, how does this affect your chances of getting a loan mod if you do file for bankruptcy?

HAMP Loan Modification and Filing a Bankruptcy

When a borrower is in an active Chapter 7 or Chapter 13 bankruptcy, the servicer may accept copies of the bankruptcy schedules and tax returns (if returns are required to be filed) in lieu of the RMA and form 4506T, and may use this information to determine the borrower eligibility (with the income documentation).

Servicer should request the schedules and tax returns from the borrower, borrower’s counsel or bankruptcy court.  If the bankruptcy schedules are greater than 90 days old as of the date that such schedules are received by the servicer, the borrower must provide updated evidence of income to determine HAMP eligibility.  Additionally, either directly or through counsel, borrowers must provide a completed and executed hardship affidavit.

Generally, your HAMP loan modification can be reviewed during the bankruptcy process, however you will not receive your permanent loan mod until after the discharge is completed.  Keep in mind that filing bankruptcy does not stop the foreclosure process, it will only delay it.  You still need to submit your loan mod application forms correctly so that you have a good shot at getting approved for a lower mortgage payment.

When you prepare the monthly financial worksheet, your income,

Income, Expenses, Assets Calculated

expenses and assets must all fit into the standard HAMP approval guidelines. If you show too much or too little income, you will be turned down immediately.  Your monthly expenses must also fit right into the approval formula as well as your assets.  If you are not sure about how to complete your monthly financial worksheet, use the loan modification calculator to help you.  This powerful tool will automatically generate your very own sample budget to follow-displaying instantly the income, expense and assets needed.

Get the real help and real answers you need-avoid mistakes and have a good chance at HAMP loan modification approval. Use the #1 selling resource for homeowners, The Complete Loan Modification Guide kit and Loan Mod Quick APP calculator-easy to use but instantly calculates the

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information you need-how much income, expenses and assets you need to show to fit the program guidelines.  Get started right away, visit MyLoanModificationCenter.com.

Income Requirements

When you apply for a HAMP loan modification, are you allowed to include any non borrower income to help you qualify?  This is a confusing guideline and one that many borrowers need to understand.  Think about it, if you don’t have enough monthly income to qualify, you may be able to use some additional income that could push you over the edge to get approved-that is pretty important to know!

HAMP Loan Modification Guideline for Non Borrower Income

A Non Borrower is someone who is not on the original note but whose income has been relied upon to support the mortgage payment.  Non-borrower household income that be considered for HAMP qualification must come from someone who resides in the residence.  Examples include a non-borrower spouse, parent, child or a non-relative, but in each case, a person who shares in the occupancy of the home and provides some support for the household expenses.

Servicers should include non-borrower household income in monthly gross income if it is voluntarily provided by the borrower and if, in the servicer’s business judgement, that the income reasonable can be relied upon to support the mortgage payment.

Non-borrower household income included in the monthly gross income must be documented and verified by the servicer using the same standards for verifying a borrowers income.  If income is being used for a non-borrower, the servicer should use only the income that the non-borrower will contribute to the mortgage.  The servicer must verify the occupancy of a non-borrower in the same manner verifies the

Income, Expenses, Assets Calculated

occupancy of a borrower after obtaining written authorization from the non-borrower to obtain the non-borrower’s credit report.

So, you are allowed to use all or part of the amount of monthly income contributed to help with the monthly mortgage expenses as long as the bank can document and verify that you actually receive non-borrower income.  While this can make the difference between approval and HAMP denial, you really need to know exactly HOW much income will be needed-be sure to run your figures through the loan modification calculator before you submit to make certain that you have the acceptable amount of income listed.

Get the real answers and real help you need to prepare your HAMP loan mod application-use the #1 selling resource, The Complete Loan

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Modification Guide Kit and Loan Mod Quick APP calculator.  This powerful but easy to use tool gives you the real answers to help you apply correctly.  The loan mod calculator instantly figures the monthly income, monthly expense and asset requirements allowing you to prepare your financial worksheet correctly.  Get started right away, visit MyLoanModificationCenter.com.

Income Requirements

Confused about how to list your income to meet the HAMP loan modification requirements?  The government loan workout program has standard guidelines for acceptance-here is some good information on how your lender will look at your income.

HAMP Loan Modification-INCOME Guidelines

The acceptable income for consideration is verified with two most recent pay stubs to cover a 30 day period.  The service may use the year to date income to determine the average periodic income and account for any non-periodic income reflected in the pay stubs.

The servicer my utilize alternative forms of income documentation (1099, W2 and IRS transcripts, or letters from employers ) when pay stubs are not available or sufficient or do not show year to day income.

Avoid Mistakes

Other earned income includes for example: commission, bonus, fee, housing allowances, tips and overtime.  Borrowers with earned income must provide reliable third party documentation describing the nature of the income (employment contract or print outs documenting tip income).

Educational grants that are intended for a specific learning purpose are not a source of income for the purposes of HAMP.

Benefit income includes items like social security, disability, survivor benefits, pension, public assistance and adoption assistance.  Food stamps are considered to be a source of income for the purpose of HAMP, because they are used by the borrower to cover reasonable monthly living expenses.  Borrowers must provide evidence of the amount and frequency of the benefits such as letters, exhibits, a disability policy or benefits statement from the provider. Copies of two most recent bank statements or deposit advices showing deposit amounts are acceptable.

Borrowers who receive Unemployment benefits must be evaluated for the Home Affordable Unemployment Program.  HAMP will not consider unemployment benefits under the standard program.

Alimony, separation maintenance, child support income may be used to qualify for HAMP.  It must be documented with copies of the divorce decree, separation agreement or other legal written agreement filed with a court, evidence of receipt of such payment, such as copies of the two most recent bank statements or deposit advices.

Once you understand the HAMP guidelines for income you will be able to

Income, Expenses, Assets Calculated

have a better shot at preparing your monthly financial worksheet correctly. You cannot show too much income or too little income or you will be instantly denied.  This can be tricky-so use the loan modification calculator to automatically figure the amount required for your specific budget.  The most common reason homeowners are denied is due to the wrong income being shown on the application-make sure you don’t’ make this same mistake.

Get the real help and real answers you need to help qualify for HAMP loan modification-use the #1 best selling resource for homeowners, The

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Complete Loan Modification Guide kit and Loan Mod Quick APP calculator.  This powerful tool provides you with the information you need-the loan mod calculator instantly and automatically figures your exact monthly income, expense and asset requirements to help you submit correctly.  Visit MyLoanModificationCenter.com today and get started right now.

HAMP Guidelines

There are standard guidelines that banks use when determining if a self employed borrower is eligible for the HAMP loan modification plan.  Knowing just how to figure your self employed income is critical to having the best chance of approval.  Here is some information that may help you when preparing your financial worksheet and showing your income correctly.

HAMP Self Employed Borrowers Guidelines:

Each self employed borrower must provide his or her most recent quarterly or year-to-date profit and loss statement.  Audited financial statements are not required.

When calculating gross income for self-employed borrowers, a service must include the borrower’s net profit plus any salary or draw amounts that were paid to the borrower in addition to making allowable adjustments used in analyzing the tax returns for the business, if applicable, to decrease the gross income or to increase gross income (expenses, depreciate and depletion).

If consistent with the Verification Policy, servicers may require up to four consecutive months of bank statements as an alternative to obtaining a profit and loss statement or if it is determined that the information in the profit and loss statement is insufficient.

HAMP loan modification approval requires that the amount of gross income for the borrower be sufficient to meet the Waterfall Method of Modification-the amount cannot be too high or too low or the homeowner

Income, Expenses, Assets Calculated

will be denied.  Self employed borrowers need to use their gross income minus business expenses to arrive at the correct personal Monthly Gross Income-this can be tricky to figure out, but the loan modification calculator will automatically figure the amount need to pass the HAMP guidelines.  This is really helpful information to know so that the financial worksheet can be completed correctly and the chances for approval will be much greater.

Get the real help you need to figure your self employed income correctly-use the #1 resource for homeowners, The Complete Loan Modification Guide kit and Loan Mod Quick APP calculator.  This powerful

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tool will give you the information you need to complete your financial worksheet and application correctly.  The loan mod calculator automatically and instantly shows you the monthly income, expense and asset requirements.  Visit MyLoanModificationCenter.com for more information and get started today.