2012 HAMP Guidelines

There is a strict formula used for HAMP loan modification approval that homeowner’s must pass if they hope to get a lower mortgage payment.  Every bank who participates in the federal plan uses this same formula, so unless you know just how to pass it, your chances of acceptance are slim.

The HAMP formula was designed to find out which homeowners are truly in a financial hardship situation, and to determine if their specific budget and current mortgage can be modified to an affordable new payment.  This HAMP formula also tells the lender if modifying the homeowners loan will be cheaper for them than foreclosing on the property.  Keep in mind that your bank will take the option that saves THEM the most money-it is always about the lender’s bottom line in the loan mod process.

Here are the basics of the HAMP loan modification formula that all banks use:

1. NPV:  this stands for Net Present Value and all banks must perform this analysis that tells them if modifying or foreclosing is cheaper for them.  Your homes current market value plays an important part here-the more underwater you are, the better your chances are.
2. LTV:  what you owe on your mortgage as opposed to what the current market value is.  Again, if you have a lot of equity, you probably won’t pass this guideline.
3. Debt to Income Ratio:  your current mortgage expenses (payment, monthly taxes, monthly insurance and any HOA dues) must be Greater than 31% of your reported Gross Monthly Household Income.  If they are lower than that, you will not pass HAMP.
4. Asset Ratio:  you are only allowed to have 3 times your monthly housing expense in the bank to pass this HAMP guideline.  Retirement
   

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   accounts are exempt from this ratio formula.

5. Waterfall Method:  this is how the bank will determine if your loan can be modified using the standard terms (lower interest rate, longer term, reduce principal).  Your monthly income has a lot to do with whether you pass this important guideline-make sure you report the right amount or you will fail this part.
6. Cash Flow:  after you pay all of your bills each month (including the mortgage and household expenses) do you have money left over? Are you barely making it?  After the loan mod will you be able to make ends meet?  You must adjust your monthly budget correctly so that your bank understands that a loan workout will actually be the answer for you.

The HAMP loan modification formula is strict, but it is just math-once you understand how to fine tune your own budget you will be able to greatly increase your chances of passing all of these important guidelines and also greatly increase your chances of approval.

You can find out ahead of time how to prepare your own budget correctly-use the #1 selling resource designed specifically to help homeowners prepare their HAMP application.  The Complete

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Loan Modification Guide kit and Loan Mod Calculator will automatically compute and display your own specific requirements for income, expenses and assets and help you to fine tune your figures before you submit them for review.  Visit MyLoanModificationCenter.com today.

6 Guidelines

Did you know that in order to qualify for a Wells Fargo loan modification there are 6 guidelines that you must pass?  This is a strict underwriting process, and every homeowner who hopes to get a loan workout and a lower mortgage payment must be able to prove to the bank that their specific situation fits right into the program criteria.

Here are the 6 Guidelines for Wells Fargo loan modification:

1. Loan To Value:  How much you owe on your first mortgage (any second lien is not included here) as opposed to the current market value.  If you have a lot of equity (more than 20%) then chances are you will not pass.  This is a case where the more underwater you, the better your shot at a loan workout.
2. Debt to Income Ratio:  Your current mortgage expenses (including your loan payment, monthly property taxes, homeowners insurance, HOA dues if applicable) must in total equal more than 31% of your Gross Household Monthly Income.  If your DTI is lower than that, then you will be denied immediately.
3. Asset Ratio:  How much money do you have in liquid assets? Retirement accounts are exempt from this ratio.  You are allowed to
   

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   have just 3 times your total monthly housing expense in liquid form (checking, savings, CD, money market, stocks) or you will fail this guideline.

4. Current Cash Flow:  How much money do you have left over each month after you pay all of your bills-including the current Wells Fargo mortgage and household expenses?  If you are barely making it or even negative each month, then you are in an acceptable financial hardship situation.
5. Waterfall Method of Modification:  Can you loan be modified using the standard methods (reduce rate to as low as 2%, increase term to 40 years or reduce principal) to achieve the new target payment?  If your income is too low, then you won’t pass this guideline and your loan cannot be modified.
6. Post Mod Cash Flow:  After the modification, does your budget show that you will be able to afford to pay and maintain the new payment each month?  If you are still barely making it, then you will be a risk for re-default and not a good candidate.  You may need to adjust your monthly expenses to pass this guideline-but you need to do it before you submit.

So, do you know if your financial situation fits into all of these strict guidelines for the Wells Fargo loan modification program?  Remember that the information you provide to the bank on your application will be used to determine your qualifications.  Your monthly gross income, net income, monthly expenses and assets must all fit perfectly into the guidelines or you will not be approved.

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You can find out ahead of time exactly what you need to show on your loan mod application-how much income, expenses and assets will be required.  Use the #1 selling resource designed specifically to help homeowners apply correctly.  The Complete Loan Modification Guide and Loan Mod Calculator will compute and display your very own specific budget requirements-use the Calculator to fine tune your figures so that you PASS these important guidelines.  Visit MyLoanModificationCenter.com today.

Debt Ratio Formula

GMAC LOAN MODIFICATION DEBT RATIO REQUIREMENT FORMULA EXPLAINED

1. Current debt ratio must be calculated using the total of your current housing expense=monthly mortgage payment, monthly amount for property taxes, insurance and any HOA dues totaled together and then divided by your total gross household monthly income.
2. New target modified payment must be achieved using the Waterfall Method to arrive at a housing expense that equals 31% of household gross monthly income
3. If current debt to income ratio is lower than 31%, application will be denied.  If loan cannot be modified to achieve a new target payment that equals 31%, loan mod will be denied.

The only way to be certain that you pass the GMAC loan modification debt ratio requirement is to report the right amount of gross monthly income on your application form.  This can be confusing for homeowners to figure out by themselves, if you show too much or too little income your application will be denied.  The secret to approval is to know ahead of time just how much income you need to pass, and to be able to adjust your budget before you submit it for final review.  That is the way to make sure you pass the debt ratio requirement.

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Get the real answers you need to prepare your budget correctly-use the #1 selling resource for homeowners, The Complete Loan

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Modification Guide kit and Loan Mod Calculator.  The powerful Calculator will instantly compute and display your own Specific income requirements and show if you are passing the debt ratio requirement and waterfall method of modification.  Make any adjustment needed to your budget so that the Calculator shows PASS on every approval category.  Avoid mistakes, save time and frustration, visit MyLoanModificationCenter.com today.

WELLS FARGO LOAN MODIFICATION DEBT RATIO REQUIREMENT

1. 1.  Current Mortgage Expense must EXCEED 31% of household gross monthly income:  This means that the total of your mortgage payment, monthly property taxes, insurance and any HOA dues must be greater than that percent of your total gross income each month.
2. 2.  New Target Mortgage Payment must equal 31% of your total reported gross monthly income:  this is what Wells Fargo and the Fed has determined will be an affordable payment for you, based on your budget as reported on your application paperwork.
3. Debt Ratio Formula:  Total all monthly mortgage expenses (first mortgage payment, monthly property taxes, monthly insurance, monthly HOA) and DIVIDE that total figure by your total Gross monthly household income.  If the result is less than 31%, you are not a good candidate for a Wells Fargo loan modification as your current mortgage payment cannot be modified any lower.

HOW TO PASS THE DEBT RATIO REQUIREMENT

1. Work on your budget ahead of time so that you know if your monthly gross income will be acceptable-you may need to make some adjustments to meet the criteria.  Too much or too little income will cause a denial, you can double check your own debt ratio by running your budget through the Loan Modification
   

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   Calculator-this program will instantly compute and display your own ratio.

2. Using the Calculator, fine tune your figures until you are passing the Debt to Income Ratio, and the new Target Payment shows PASS under the Waterfall Method.
3. The goal is to make any necessary adjustments to your income, expenses and assets before you submit your paperwork for review so that you know your budget fits right into the approval guidelines.

Wells Fargo will review your paperwork for debt ratio, but they will also be looking at 6 other triggers for approval-all based on the income, expenses and assets that you report on your application.  Use the Loan Modification Calculator to help you prepare your paperwork correctly-you will see what your specific requirements are and then be able to make the required adjustments ahead of time.

Get the real answers you need-use the #1 selling resource for homeowners, The Complete Loan Modification Guide kit and Loan Mod Calculator.  Avoid the reason most loan workouts are denied-learn exactly how to

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prepare your budget so that you have the very best chance of approval.  Visit MyLoanModificationCenter.com today.

HAMP

The HAMP program qualifications may seem so difficult to figure out and get approved for a loan mod, homeowners struggling through the process could feel like no one actually succeeds with the program.  The facts support the perception that very few do get a loan workout, but it still remains true that hundreds of thousands of borrowers have been given permanent loan mods under the HAMP plan.

Here are some quick HAMP Facts & Figures:

1. $9.9 billion dollars have been saved by homeowners through the federal loan modification plans
2. $529.75 is the average monthly savings realized by homeowners who received loan mods
3. 83% of eligible homeowners whose trial mod became permanent
4. 25% is California’s share of the federal loan modifications

So why do some borrowers succeed with HAMP while other deserving borrowers do not get any help?  Sometimes it may just be luck, but in order to really have a good shot at approval the homeowner must be able to prepare and submit their application correctly-and this means that they can prove in black and white that they fit right into the very narrow approval criteria required by HAMP.  The guidelines include:

1. Gross Monthly Income-Debt to income ratio
2. Monthly Expenses-Cash flow
3. Assets-Asset ratio
4. Loan To Value-NPV test
5. Waterfall Method-Must pass the standard method of modifying the current loan

Apply Correctly

The problem for most borrowers who apply for HAMP is that they really have no idea how to complete the monthly budget financial worksheet portion of the RMA

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application.  The lenders will not provide this specific information to applicants, and so the majority of loan mods are declined simply because the borrower did not know how to fine tune their own monthly budget in order to meet the HAMP program qualifications.

Get the answers you need to increase your chances of HAMP loan mod approval, use the #1 selling resource for homeowners, The Complete Loan Modification Guide kit and Loan Mod Calculator.  This system was specifically designed to help borrowers learn the requirements for income, expenses and assets to pass the standard guidelines.  The Calculator will instantly compute and display your own specific budget figures.  Visit MyLoanModificationCenter.com today.

Wachovia

The Wachovia Pick-A-Payment loan was perhaps one of the most devastating mortgage programs ever seen in the U.S.  Hundreds of thousands of borrowers found themselves stuck with this confusing and toxic loan, with the end result being a growing loan balance and decreasing home values.  This toxic combination has meant disaster for many homeowners, and even a class action lawsuit did not do much to alleviate the damage.

The Pick A Payment lawsuit basically gave borrowers a second shot at applying for a Wachovia loan modification, but it did not provide for any special consideration or an easier application or approval process.  Although thousands have filed complaints, the lender still is turning down far more applications than they approve for a loan workout.  Why is Wachovia so difficult to work with for homeowners needing a loan mod?

Wachovia was one of the banks with the largest portfolio of the deadly ARM, Pick a Payment loan.  These risky loans were all fine until the housing market crash, and then the low payments offered under this mortgage began to back fire.  However, Wachovia is no dummy when it comes to protecting their bottom line, and so they insured all those bad loans against loss.  This means that they get paid even on defaulted loans-making it more difficult to mitigate for a loan workout.  Keep in mind that the government plans mandate that the bank take the least expensive plan of action-so if a foreclosure is going to cost less than a loan mod, the house gets taken back and sold out from under the borrower.

So is there any way that a homeowner can win the battle and get approved for a Wachovia loan modification?  Yes, but only if they can fit into the very tiny approval “box” that the bank requires.  This means that the application paperwork submitted by the homeowner must clearly prove in black and white that their financial situation meets all of the strict guidelines for acceptance.

1. Gross monthly income-this cannot be too high or too low, otherwise the borrower will not pass the debt ratio criteria or the Waterfall Method
2. Loan to Value-the difference between what you owe on your mortgage and the property’s current market value is used in the NPV calculation.  This is one case
   

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   where the lower your home’s value, the better chance you have for loan mod approval.

3. Asset Ratio-how much money do you have in liquid assets tells the bank if you are in a acceptable financial hardship situation.
4. Current Cash Flow-are you barely making ends meet each month or even a bit negative after you pay all your bills?  Again, this is evidence of your financial struggles.
5. Waterfall Method-do you pass this standard calculation for modifying your Wachovia mortgage?  Your current loan must be able to be modified using standard methods of interest rate reduction, longer term or principal forbearance or deferral to achieve your new target payment.  Your gross monthly income is a critical part of this calculation-you can verify if your income will pass by using the Loan Modification Calculator.
6. Post Mod Cash Flow-is a loan workout a good solution for you?  If you are still showing a negative cash flow after your loan workout, then you are a risk for re-default and not a good candidate.

Make sure that when you apply for a Wachovia loan modification, you show the bank exactly what they need to see for your income, expenses and assets.  Get the real help and real answers you need with the best selling resource, The Complete Loan

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Modification Guide kit and Loan Mod Calculator.  This system was designed specifically to help homeowners pass the guidelines.  Visit MyLoanModificationCenter.com today.

RMA List

Do you know how to complete the Bank of America RMA form to make sure you get approved for a loan modification?  This is harder than it sounds, because unless you show the bank exactly what they need to see on this application, you will be turned down for a loan workout. Here is a quick checklist of the most important homeowner requirements for approval to help you avoid mistakes and increase your chances of success.

BANK OF AMERICA RMA FORM CHECKLIST FOR HOMEOWNERS

1. Monthly Gross Income-Make certain that the amount you list on page 2 of the RMA form will pass the guidelines.  You cannot show too much income or too little income-otherwise you will fail the requirements for debt ratio and you will not pass the Waterfall Method criteria.  You can verify how much income you need to report by running your budget through the Loan Mod Calculator, a tool for homeowners use.
2. Monthly Household Expenses-verify that the bills and expenses you list prove to the bank that you are barely making it each month, but also prove to Bank of America that a loan modification will be a solution for you.  Your pre-mod cash flow and post mod cash flow must pass the requirements-you can double check that your expenses will be acceptable by using the Loan Modification Calculator, then make any necessary adjustments before submitting to the bank.
3. Asset Ratio-make sure that your assets pass this important criteria and prove to Bank of America that you have exhausted all other options and can no longer
   

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   afford your mortgage.

4. Hardship Letter/Hardship Affidavit-the RMA form has 4 options for you to choose from:  loss or reduction in income, high monthly debts, lack of reserves, increased expenses.  You can also write a more detailed explanation of your financial hardship on a separate sheet of paper, be sure to keep it brief and sign it before you attach it to the application.
5. Proof of income reported-you must provide proof to Bank of America for any income you report on the RMA form.  Pay check stubs, canceled checks, bank deposits, award letters, bank statements, etc.  Everything must match up or they won’t count the income correctly.

There is only one way to get approved for a Bank of America loan modification-complete your RMA form so that it proves in black and white that you are the perfect candidate.  Showing just the right budget figures is the secret to success-take the time to verify that your income, expenses and assets will all pass the requirements for approval before you submit your application.

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Get the real answers you need-use the best selling, #1 resource for homeowners, The Complete Loan Modification Guide kit and Loan Mod Calculator.  This powerful system will automatically calculate and display your own specific budget requirements for income, expenses and assets.  Use this critical information to help you prepare your RMA correctly for fast approval.  Visit MyLoanModificationCenter.com today.

Guidelines

Here are the 7 Most Important Guidelines for a Citimortgage Loan Modification

1. Debt Ratio-Your current mortgage expenses (house payment, property taxes, insurance and any HOA dues) must in total be greater than 31% of your gross household monthly income.  If that figure is lower, then you will be denied immediately.
2. Loan to Value-how much do you owe on your mortgage as opposed to the current market value?  If you have a lot of equity, then it will probably be cheaper for Citimortgage to foreclose than to modify.  This is one case where the lower the value, the better your chances are.
3. Asset Ratio-what are your current liquid assets?  Do you pass this guideline and demonstrate a real financial hardship?
4. Current Cash flow-after you pay all of your current bills, do you have money left over each month or are you barely making it; maybe even going negative each month? The bank looks at this to see if you pass the imminent risk of default category
5. Waterfall Method-can you mortgage be modified using this method to achieve a new target payment that equals 31% of your reported gross income?  This is where you need to know just how much income to report-too low and you will not pass this important guideline
6. Principal Reduction Alternative-does your loan qualify? If the bank has to defer or forgive too much of your loan to pass the Waterfall, then you will fail the NPV test.  Again you need to know how much monthly income will be required to pass this mitigation test
7. Post loan mod cash flow-is a loan mod really a solution for you?  If your cash flow shows that after your loan is modified that you still can’t make ends meet, you
   

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   will be denied because you will be a risk for re-default.

The Citimortgage loan modification guidelines may be confusing, but this is all part of the underwriting and loss mitigation that each borrower must go through.  Unless you can pass all the criteria, the application will be turned down.  This can be tricky to figure out on your own, and unfortunately the bank will not tell you specific information on your own budget requirements.  You need to know this information ahead of time so that your application can be prepared and submitted perfectly.

Get the real answers you need-avoid mistakes and frustration.  Use the #1 resource designed specifically for homeowners-The Complete Loan Modification Guide kit and Loan Mod Calculator.  This proven system will instantly compute and display your own specific budget requirements-showing monthly income, expense and assets needed to pass the Waterfall Method.  You can use this important tool to help

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you formulate the perfect budget figures when you submit your own application.  Visit MyLoanModificationCenter.com today.

HAMP

The federal loan workout program has standard guidelines, every homeowner who wants to get a HAMP loan modification will have to prove that they meet the qualifications.  How do you do this?  It all comes down to preparing and submitting your application paperwork correctly-you must prove to the bank that your situation fits the program criteria.  Although not everyone will qualify, you can increase your chances of approval if you know just what your bank needs to see on your paperwork.

HAMP LOAN MODIFICATION APPROVAL QUALIFICATIONS

1. You must live in the home, loan originated before Jan 1, 2009, and have a loan amount less than $729,750
2. Your current housing ratio must be GREATER than 31%-meaning the total of your mortgage payment, property taxes, insurance and any HOA dues equals more than 31% of your household gross income.
3. Your monthly income must be sufficient to pass the Waterfall method of modification, but cannot be too high or you will fail the debt ratio criteria.
4. The household monthly expenses must demonstrate a financial hardship, but cannot be too high or the post mod cash flow criteria will fail.
5. Your assets must pass the Asset Ratio test
6. The new target payment must be affordable and your mortgage be modified within the parameters of the Waterfall Method.
   

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7. You must pass the NPV test, proving that it is cheaper for the bank to modify you rather than foreclose.

This may seem very confusing, but keep in mind that HAMP requires a very strict underwriting process and each borrower must pass all of these qualifications or they will not be approved.  It’s  not surprising that so many fail-this can be too complicated for most folks to figure out on their own.  Unfortunately, your bank will not tell you exactly how to complete your application, or explain how much income, expenses and assets you should report to actually qualify.

You need to know ahead of time just how to fine tune your own budget figures so that you can qualify for the HAMP loan mod you need and deserve.  You can use a powerful tool designed specifically for homeowner use to help you with the information you need to know.  The Loan Modification Calculator mimics the approval qualifications for HAMP, and will instantly compute and display your own specific budget requirements.  You can then fine tune your income, expenses and assets using the Loan Mod Calculator until you see that you pass all of the criteria.  Visit MyLoanModificationCenter.com today to get started right.

Apply Correctly

Ask any struggling homeowner how they are doing on their Indymac loan modification, and they will undoubtedly tell you how difficult it is to pass the approval guidelines. Although the bank does offer the HAMP government program, most borrowers do not really understand exactly what they need to show the bank in order to get approved for a new lower mortgage payment.  The only way to get the help you need an deserve is to prepare your application correctly-and prove to the bank in black and white that you are a perfect candidate for loan mod help.

Indymac loan modifications have been difficult to get from the very beginning, and although the process has been streamlined over the last year, the approval guidelines are still the same.  In order to get approved, the bank will be looking at your application very carefully to determine if you pass the criteria.

INDYMAC LOAN MODIFICATION APPROVAL GUIDELINES-QUICK CHECKLIST

1. Right amount of monthly income-this is critical because if you show too much or too little gross income, you will not pass the Waterfall Method of modification and your loan mod will not be approved, and your debt ratio may not be acceptable.
2. Monthly household expenses meet the banks guidelines for cash flow and financial hardship.
3. Assets-do you pass the asset ratio test?
4. Can you current loan be modified to achieve your target payment and still be cost effective for Indymac?  This is called loss mitigation, which means that the bank
   

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   will determine if modifying or foreclosing is cheaper for their bottom line.

When you apply for an Indymac loan modification, you must complete the 3 page RMA form.  Page two of this form is the financial worksheet-this is where you must break down your household budget.  Your gross monthly income, monthly expenses and assets will be carefully reviewed and checked to see if they pass the approval guidelines.  Before you send this in for review, you can verify that your budget will be acceptable by running it through the Loan Modification Calculator.  This powerful tool will instantly show you if you are passing or failing, and where you may need to make adjustments to your budget before you send it in for final review.

Make sure that you pass the approval guidelines, use the #1 selling resource for homeowners, The Complete Loan Modification Guide kit

and Loan Mod Calculator.  This proven system will instantly compute and display your own specific budget requirements-allowing you to know ahead of time just how much income, expenses and assets to show on your RMA form.  Visit MyLoanModificationCenter.com today.