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Treasury Announces Extra Incentives for HAMP Borrowers

Administration officials with the Treasury Department and Department of Housing and Urban Development (HUD) announced extra incentives for borrowers with modified loans to encourage them to keep up with their payments.

Now, borrowers who stay on top of their payments can earn an extra $5,000 towards principal balance reduction in the sixth year of a modified loan, in addition to the $5,000 accumulated over the first five years under the Home Affordable Modification Program (HAMP). They also have the option of reducing their monthly payments through re-amortization.

Some modified loans (approximately 30,100) from the early days of HAMP – which was launched in 2009 – have undergone or will soon undergo reset rates ranging from 4 to 5.4 percent, with the interest rate increasing by one percent per year until it reaches the original modification rate.

In a press release, HUD Secretary Julian Castro expressed optimism for the new changes, saying, “These enhancements will expand the opportunity for more folks to stay in their home, stabilizing local communities and continuing our nation’s positive economic momentum.”

Other program enhancements include increased relocation financial assistance for homeowners that complete a short sale or deed-in-lieu transition.

Due to the technical complexities of programs such as HAMP, borrowers often have little to no understanding of their rights and options. If you need guidance from a skilled Pasadena loan modification attorney, please contact Lee Green & Stewart, Attorneys at Law today. Our team is dedicated to helping clients with legal and financial matters concerning what is perhaps their most important asset: their home. Call (626) 325-0770 to schedule a consultation.