Denied HAMP Loan Modification After Trial Period Due to Overtime Worked During 3-Month Trial Period.

by Chris

My employer, after hearing of my struggles, granted me additional overtime while on my 3-month HAMP loan modification trial period, which led to the denial of my loan modification request. Do I have any recourse to try and save my "one time" application into the HAMP program?

The lender has demanded I repay the deferred portion of my payments in ridiculous monthly payments.

What seemed like a blessing has turned into a much worse situation than what I was in before applying for the HAMP program. I just don't want to lose my one and only attempt at saving my home and would like to know if there is any way to salvage the initial application?

Mortgage Loan Modification Answer:

I'm sorry to hear your lender denied your loan modification application from going permanent after your trial period.

By accepting your employer's offer to help by increasing your hours, you've changed your financial position from when you initially applied and got approved.

Of course, as you now know, you should not do anything to change the financial information you submitted to your lender until after your loan modification has been made permanent and the agreement has been executed, finalized, and firmly in place.

The only thing you can do now is to cut back on your work hours to the same amount you put down on your initial HAMP loan modification application.

Call your lender and inform them of the reduction in your hours and see if they would allow you to re-apply for HAMP. If your lender tells you that you're no longer eligible for HAMP, then ask if you can apply for a traditional loan modification.

Almost all lenders have an in-house loan modification program, which is better known as a traditional loan modification program. You will have to start the application process over again, but it is the only way to try to salvage your eligibility to get your loan modified to a more affordable monthly payment after being denied for HAMP.

You may or may not receive the same rate and terms you received from your HAMP approval because lenders use their own discretionary formulas to qualify you for their in-house or traditional loan modification programs.

It is worth a try. Many people have been able to obtain a loan modification this way after being denied under the HAMP program.

All the best to you. Please come back and let us know how everything goes for you.

Comments for Denied HAMP Loan Modification After Trial Period Due to Overtime Worked During 3-Month Trial Period.

Average Rating starstarstarstarstar

Click here to add your own comments

Oct 15, 2010
Great comments Dean!
by: Grace

Hi Dean,

Thanks for sharing additional helpful information. I appreciate your taking the time to help others.


Oct 07, 2010
Income change during modification
by: Dean

The lender is supposed to annualize the income. Obviously the lender considered the overtime recurring rather than "seasonal" and has ended. Submit pay check stubs showing that it has ended. You need a letter from your employer stating the overtime was seasonal and your hours need to be adjusted so your compensation is the same as before application for HAMP.

For example say your OT was $100 for 6 pay periods and you are paid every two weeks . When you submit your financial data on your earnings the OT would be computer as follows: $100 x 6 = 600/26 (pay periods per year)/2 (to get on weeks ot) = 11.54 per week. Now multiply by 4.33 (weeks in a month) = $49.96 OT per month. Put the documentation together and get it to the Loan Servicer.

This is the kind of thing the Loan Servicers are doing that Congress is so upset about.

Second, you should keep a note pad documenting each conversation you have with the loan servicer. with Date, Time, Name , employee ID, Telephone extension and a brief summary of the conversation.

If this is an FHA loan call the FHA, a HUD loan call HUD. I have previous posts on this forum telling how to tell what type of loan you have and how to proceed.

Above all file a Consumer Complaint with the Federal Reserve (see my previous posts on the process there) and a copy to your Senator and Representative.

Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to HAMP C2.0.