Every day, the Home Affordable Modification Program (HAMP) is helping thousands of Americans just like you to avoid foreclosure. If you qualify, this federal government program can lower your monthly mortgage payment to a point where it's affordable again. So you can get back on your feet, and get on with life.
If you've been accepted into the program, are you home free? Not quite yet: You still have several responsibilities to meet before HAMP can be your permanent solution. Here's what you must do -and the #1 thing NOT to do during the HAMP process.
It all starts with a 'trial period.'
If you qualify, HAMP requires that you enter a 'trial payment period' before receiving the loan modification that will lower your monthly payments permanently. During this period, usually 90 - 120 days, your monthly mortgage payments will be lowered to 31% of your gross monthly income as determined by a trained underwriter. This will be accomplished by lowering your interest rate, extending the loan term or deferring some portion of principal repayment to a later date or a combination of both.
It is important to understand that this trial period is not a permanent payment reduction, but is instead the last step to qualifying for the modification. Your modified terms may change slightly based on changes that occur on your account during the trial period.
Why is there a trial period?
The trial payment will be set at the amount your expected modified payment will be which allows you to establish that you are able to afford the modified payment and that you are doing everything you can to meet your mortgage obligation - including making every trial period payment on time.
For more information about HAMP documents, please visit the Making Home Affordable website. If you need help completing the forms, assistance is available. If you're a CitiMortgage customer, call the CitiMortgage Homeowner Assistance Team at 1-866-272-4749. The hours are Monday - Friday, 7 am to 11 pm; Saturday and Sunday from 7 am to 7 pm. All times are Central. You can also obtain help from a HUD-approved housing counselor at no charge. Just call the Homeowner's HOPE™ Hotline (888-995-HOPE).
A primary reason modifications are denied is because requested documents aren't received in time.
Your modification package will indicate the deadline for submitting all documents. Check and double check that you submitted every document requested by that deadline. Once you believe you have submitted all the required documents to your mortgage company, contact them to make sure they have all the documents. If you're a CitiMortgage customer, you can monitor your HAMP status on citimortgage.com once you set up your online profile or call 1-866-272-4749.
If your mortgage company asks for additional or updated documentation at any time, don't drag your feet. If you do, you run the risk of having your modification denied--even after all of your hard work to date. Stay in touch with your mortgage company--keep good records of every communication--and make every effort to help your mortgage company develop a permanent solution. For CitiMortgage customers, the trial period will begin once you have provided all required documentation and your account is underwritten. Once you are set up on a trial, it is critical that you make your every payment on time. Don't skip a single trial period payment--no matter what. If you do not qualify for HAMP, there may be other options available for you.
Being granted a trial period is no guarantee that you'll receive a permanent loan modification. If you don't, what's next? To help you plan now, there are two things you should keep in mind as you apply for a modification:
· Loan Terms: During the trial period, your original loan terms are still in effect. So you're still responsible for the difference between your original and trial mortgage payments. If you're approved for a permanent solution, the payment difference is added to your loan balance, along with any other past due amount. But if you're not approved, you'll owe the difference immediately. At CitiMortgage, homeowners in this situation often tell us, "I didn't know I was responsible for the difference in payments. Now I'm even further behind."
The best plan is to prepare now, in case you're denied a permanent HAMP solution. Your lender may have other foreclosure prevention options. If you're a CitiMortgage customer, call the CitiMortgage Homeowner Assistance Team at 1-866-272-4749.
· Your Credit Score: During the trial period your loan will be reported as paying under a modified payment agreement. For more information about credit scores, visit the Federal Trade Commission Consumer Protection website (www.ftc.gov).
It's important to have a 'Plan B' if HAMP doesn't work for you. While a loan is being considered for HAMP, your mortgage company can't proceed with the foreclosure process. But if you're not approved for a permanent solution, you need to be ready to discuss other foreclosure prevention options with your lender immediately. If you're a CitiMortgage customer, call 1-866-272-4749.
Frequently Asked Modification Program Questions
for CitiMortgage Customers
- Should I wait to send in the entire document package if I am missing some documents?
o No. Send the documentation that you have now, however remember that all of the required documents must be submitted by the date given on the cover letter in your modification package. Once you have obtained the missing documents, write your account number on each document and send them to:
- Is there a Spanish version of the doc package?
o Not at this time. However, call us and a representative will assist you with your questions and instructions.
- When do I have to have all the docs in by?
o You must return your documents no later than the date indicated on the cover letter in your modification package.
- How can I make my trial payments?
o You can make payments by phone or mail. Call 1-866-272-4749 to make a payment by phone, or mail your payment to:
PO Box 688950
Des Moines, IA 50368-8950
- I want to apply for a modification, who can I call to see if I qualify?
o You can contact CitiMortgage Homeowner Assistance Team at 1-866-272-4749. The hours are Monday - Friday, 7 am to 11 pm; Saturday and Sunday from 7 am to 7 pm. All times are Central. Information to have when you call include:
§ Payment amounts and balances of 2nd mortgages, automobiles or student loans.
§ Copies of the two (2) most recent pay stubs indicating year-to-date earnings.
- If you are self employed or an independent contractor, have your most recent Quarterly or Year-to-Date Profit/Loss statement.
§ Most recent personal checking, savings, money market, mutual funds, stock and bond statements.
§ Current property tax and insurance statements.
§ Homeowner's Insurance Policy Declaration page.
- Are all loan modifications the same?
o No. There are different modification programs and they are not all exactly alike. While all modification programs permanently modify the terms of your loan, some programs offer a temporary payment reduction to help you through a temporary financial hardship, and others provide long term changes.
Be careful to avoid foreclosure rescue and modification scams that 'guarantee' to save your home or lower your payment for a fee.
- Are the requirements the same for all modifications?
o No. There are a variety of modification programs and each program has its own requirements.
- Can my loan be modified more than once?
o In some situations it may be possible, but it depends on a number of factors. For example, the Government's HAMP program can only be used one time. To learn more about your options, contact the CitiMortgage Homeowner Assistance Team at 1-866-272-4749.
- If my loan is modified, will my new payment amount and interest rate be the same for the rest of the loan term?
o Depending on the modification program, the payment could be adjusted permanently or just for a period of time. In some cases the modification temporarily lowers the payment amount for a period of time, but then gradually increases over time. Be sure you completely understand the terms of your modification to avoid any surprises.
- Do you have to be past due before you apply for a modification?
o Requirements vary, so we recommend you call and CitiMortgage Homeowner Assistance Team at 1-866-272-4749.
- Are there any state specific requirements for modifications?
o Yes. Some states do have additional requirements.
- How long will it take to find out if my modification request was approved or denied?
o Modifications are very complex and can take some time. The amount of time will vary depending on the modification and your unique situation. In some cases the modification request may also need approval from the loan investor, which can require some additional time. While waiting to find out the decision on your modification request, you can monitor the status on citimortgage.com once you set up your online profile.
- Are there any fees for a loan modification?
o No. Customers are not asked to pay a fee for a loan modification. If there are costs associated with the modification, such as payment of back taxes, you will have the option of adding that amount to your mortgage balance or paying some or all of the expenses in advance.
- Are there any tax implications if I do a modification?
o The best thing to do is consult with a qualified tax professional about your unique situation.
- Is there any way to expedite my modification request?
o The best way to expedite your request is to return your completed modification paperwork and required documentation as soon as you can. The faster that information arrives, the faster the review process can take place.
- Can I email or fax my modification paperwork?
o No. Due to the sensitivity of the information, we ask that you do not fax or email your modification paperwork.
- I received a letter from a company that states they can help me get my modification processed faster and guarantee I will be approved. Is that true?
o No. Unfortunately, loan modification scams are rampant. Be very skeptical of anyone claiming they can expedite or guarantee a loan modification for a fee. If the claim seems "too good to be true," it probably is too good to be true. The best defense against these scams is knowledge. The Loan Modification Scam Alert website (loanscamalert.org) provides valuable information about loan modification scams and how to avoid them.
- Is it true that an escrow account will be added to my loan for payment of my homeowners insurance and taxes if the modification is approved?
o If you accept a loan modification, an escrow account will likely be established on your loan for payment of future property taxes and hazard insurance. The new escrow account may require an initial deposit for sufficient reserves to pay upcoming taxes and insurance.
- I've been making monthly trial period payments, which are significantly lower than my regular payment, while my modification request is being processed. Will I be responsible for making up the difference between my regular payment and my trial payment amounts if my modification is denied?
o Yes. The terms and conditions of your original loan remain unchanged during the trial period. If the modification request is denied, you are responsible for any amount past due.
- Will my modification be denied if I am late with my trial payment?
o Homeowners who are unable to make the required payments during the trial period are not eligible for a permanent modification. However, you may be eligible for other foreclosure prevention options.
- Will my account accrue late charges while I'm in the trial period?
o Yes. The terms and conditions of your original loan remain unchanged during the triall period. If the modification request is denied, you are responsible for any the amount past due, fees and other charges that may have been paid on your behalf, such as past due taxes.
- I'm in the trial period and received a call from the Collections department, what should I do?
o While you should not receive collection calls during the modification process, there could be an overlap between the times our systems are updated and the call is scheduled. If you receive a collection call, let the representative know that you are in the trial period for a loan modification. That should end the call immediately.
- Why would I receive a foreclosure notice while my modification request is being reviewed?
o During the modification process, all foreclosure activities are stopped. If you receive a foreclosure notice during the modification process, it was likely the result of an overlap between the time our systems were updated and when the letter was scheduled.
- My modification request was denied. Are there any other options?
o Yes. To learn more about your options, contact CitiMortgage Homeowner Assistance Team at 1-866-272-4749.