Mortgage Status:
The Mortgage must be in Default or Imminent Default. The Mortgagee must ensure that the Mortgage meets the following eligibility criteria for an FHA-HAMP:
- Default is due to a verified loss of income or increase in living expenses;
- The Mortgage must not be in foreclosure at the time the permanent FHA-HAMP documents are executed; and
- Three or more full monthly payments are due and unpaid (i.e., 61 Days or more past due) when the FHA-HAMP documents are executed.
A Borrower facing Imminent Default is defined as a Borrower who is current or less than 30 Days past due on their Mortgage Payment and is experiencing a significant, documented reduction in income or some other hardship that will prevent them from making the next required Mortgage Payment during the month that it is due.
To modify a Mortgage facing Imminent Default under FHA-HAMP, the Mortgagee must ensure that the following conditions are met:
- Imminent Default due to a verified loss of income or other hardship as explained in the definition of Imminent Default; and
- The Mortgagee obtains documentation evidencing the cause of the Imminent Default.
The Mortgagee must ensure the Borrower meets the following eligibility criteria for the FHA-HAMP Option:
- The Borrower must be an Owner-Occupant Borrower who is occupying the Property as a Principal Residence.
- The Borrower has not executed an FHA-HAMP agreement in the past 24 months. Presidentially-Declared Major Disaster Area (PDMDA) Disaster Loss Mitigation Options and COVID-19 Home Retention Options do not count against this requirement.
- The Borrower has recently experienced a verified loss of income or increase in living expenses and all Borrowers on the Note have signed and submitted hardship affidavits attesting to and describing the hardship.
- One or more Borrowers receives Continuous Income.
- The Mortgagee determines an affordable monthly payment can be achieved using the Handbook 4000.1 Appendix 4.0 – FHA-Home Affordable Modification Program (FHA-HAMP) Calculations.
- The Borrower has successfully completed a TPP based on the FHA-HAMP monthly Mortgage Payment amount.
Property Condition:
The Mortgagee must conduct any review it deems necessary, including a property inspection, when the Mortgagee has reason to believe that the physical condition of the Property adversely impacts the Borrower’s use or ability to support the debt as follows:
- Financial information provided by the Borrower shows large expenses for property maintenance;
- The Mortgagee receives notice from local government or other third parties regarding property condition; or
- The Property may be affected by a disaster event in the area.
- Handbook 4000.1 III.A.2.k.v(B)(1)-(3) available at: https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh