Income level Required for HAMP Loan Modification

by Jerry
(Lewisville, Texas, USA)

Question

I am told that our income is just over the guideline to allow a Hamp modification. What is the maximum amount?

Mortgage Loan Modification Answer:

According to HAMP guidelines, it's not so much the level of your income but the ratio of the total of your (PITIA) principal, interest, property taxes, insurance, and homeowners association dues, if any, in relation to your income. Take your monthly PITIA and divide it by your total gross monthly income. This is called the front-end ratio.

If your front-end ratio is lower than 31%, you will not likely get approved for a HAMP loan modification as most lenders are not obligated to lower your monthly mortgage payments below the 31% which is required by the HAMP program. They can if they want to, but are not likely to do so because they do not receive any additional financial incentives from the government for doing so.

Please ask your lender to clarify their reason for denial of your application.

Please feel free to post again if you have any further questions.

All the best of luck to you.