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The HAMP loan is finally taking off…(Home Affordable Modification Plan) US Department of Treasury, Office of the Comptroller of the Currency (OCC) www.occ.gov reported that Loan modifications rise 69 percent in third quarter. 

Apparently there were more than 680,000 home loan modifications and payment plans in the third quarter of 2009, a 69 percent increase over with the second quarter.  This is really good news.  In addition the report states in part that servicers provided close to 274,000 trial modification plans under the  “Home Affordable Modification Program” (HAMP) during the third quarter.  I remember recently seeing reports that some lenders had only done 80 or 90 modifications over the last 9 months…these new numbers are encouraging.

Even better news is that servicers provided almost twice as many home retention actions as new foreclosures instituted.  We may be rounding a corner or find we’re getting closer to the end of the tunnel.  We’ll see as 2010 approaches what it all means, but more modifications will affect that foreclosure doom and gloom so often quoted and reduce those numbers.  How much no one knows at this point but one can hope this is a step in the right direction.

The component of the HAMP plan that will assist homeowners in keeping their homes is found in the final statistic that 80 percent of the loan modifications in the third quarter reduced monthly principal and interest payments.  

Dan Harris who wrote the book “How to Modify your Mortgage” http://www.loanmodbook.com/ explains how to best handle a loan modification request to the lender by saying “First get educated QUICKLY, learn everything you can about the HAMP guidelines and what your lender offers in the way of assistance. Plan your request for assistance and be organized and prepared BEFORE you submit anything to your lender. Remember the disclaimer they read you when you call? It’s the one where they tell you they are required by law to advise you they are attempting to collect a debt and anything you tell them will be used for that purpose. No matter how nice the representative sounds, they work for the lender and they are there to help collect your payments.” 

                                                                                                                                                Good points Dan…you should go to your lender website, there is generally a place where is says loan modifications or “having trouble making payments?”…follow that link and get the financial and other requirements for submitting a modification.  Most often there will be forms you can download to use for this purpose.  This will tell you the banks requirements for the loan modification.  Then when you do call, keep a log of who you talked to, date and time, what questions did you asked and the answers given.  There is likely to be a different person every time you call so keeping good records is important for continuity of your next call.  And do as Dan says and Don’t tell them anything you don’t want them to know.  Stick to the facts, of course explain your hardship and situation, but don’t embellish.  Writing it out ahead of time helps to keep you from rambling.  And don’t be embarrassed.  You are not the only person they’ve talked to and it is much more matter of fact to them than you know.  That alone allows you to handle this more like a business call and makes it less personal.  You are negotiating on your behalf.

Lastly, your Realtor can be a resource. They talk to clients in various stages of modification, short sale and foreclosure and have some insight into the different lenders and a reference point for the process.  They may not know all the answers but they know how to help you find resources.  This is what we do…assist our clients in all kinds of markets.  Most of us are not just there for the good times, but any time you need real estate counsel.