Will Increase in Income Affect HAMP Loan Modification After It Has Been Approved and Finalized?

by Carl
(Chicago)

One applies for a HAMP Loan Modification and the P & L for the quarter reflects a monthly income of say 4,000. A permanent loan modification is granted in April. Later in that same year, say in November, the borrower's income goes up significantly. The borrowers gross income for the year that the perm mod was granted is now substantially higher than 48,000 that was used to base the modification on. Will this cause a problem for the borrower? Will the U.S. Treasury monitor or check up on the figures that were given to the lender when compared to the actual tax return that is filed for the year the modification was granted?

Mortgage Loan Modification Answer:

To my knowledge, once your loan modification is approved and your agreement has been finalized, you are in the clear. You can go on and win the lotto and your bank cannot come after you to re-modify your loan.

The terms of your loan modification were based on the snapshot of your income and expenses at the time of your application. If you provided your income and expenses as they were at that time, then you are fine.

Neither your bank, nor the U.S. Treasury monitor what happens with your income and expenses after your loan modification has been finalized and put into effect.

As I mentioned above, you could win the lotto after you get your loan modified, and the bank cannot undo your loan modification agreement as it stands.

Congratulations on the increase in your income! Invest and save wisely for the next rainy day. Thank you for visiting our site. Please let others know about us.