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December 23rd, 2014    

UPDATE: Federal Housing Administration’s Home Affordable Modification Program (FHA-HAMP)

On December 4, 2014, the U.S. Department of the Treasury and the U.S. Department of Housing and Urban Development (HUD) announced enhancements to the Making Home Affordable (MHA) program. This message clarifies for FHA-approved mortgagees the impact of those enhancements on FHA’s Home Affordable Modification Program (FHA-HAMP).  

FHA is pleased to announce that subject to the U.S. Department of Treasury’s guidelines, FHA-HAMP borrowers will also be eligible to earn $5,000 in the sixth year of their performing loan modification.  This incentive, in conjunction with annual incentive payments of $1,000 per year during the first five years of a performing loan modification, may reduce an FHA borrower’s unpaid principal balance by as much as $10,000.  However, as a result of Mortgage-Backed Security (MBS) requirements and FHA-HAMP modifications being executed at market rates, performing FHA-HAMP loan modifications and FHA stand-alone loan modifications may not be re-amortized.