For the sake of clarity it's important to note that Mike's situation/case happened long before loan modification became popular vernacular. Even if it had been, a loan modification would not have been something that ultimately would have helped him because he was never actually in default. That being said:
You can't shake a stick without hitting a media report regarding loan modifications. Practically speaking, loan modifications can be an excellent tool to help homeowners get back on their feet. The problem is, they are damned hard to get, just ask any of the people who have been waiting over 12 months to get theirs. On top of that, many homeowners find the whole "loan modification" process and issue terribly confusing.
You DO NOT need to hire anyone to help you apply for a loan modification. Although some people find it helpful to have assistance with the loan modification process, there are plenty of FREE resources (put together by the government) that do just that.
You CAN apply for a loan modification on your own. However, we recommend keeping excellent records AND creating a VERIFIABLE paper trail as you go in the event your loan modification attempt(s) end up in a court room as a foreclosure instead of a modified loan.
HAMP = Home Affordable Mortgage Program
HAMP is a government funded program with a website at http://makinghomeaffordable.gov/
The government has stated that HAMP will be available until December 31, 2012.
A HAMP Loan Modification is only one type of loan modification and requires, at a minimum, that the homeowner fill out a HAMP Application located at: http://makinghomeaffordable.gov/requestmod.shtml
When you send the HAMP Application and supporting documentation to your Mortgage Servicer, we suggest you send it USPS, prepaid, first class, certified return receipt requested mail. DO NOT email your initial application and supporting documents.
Which Banks Are Contractually Obligated To Offer HAMP Loan Modifications
When banks took TARP money, they were required by the government to sign contracts binding them to perform loan modification and refinancing programs. A comprehensive listing can be found here: http://www.financialstability.gov/impact/contracts_list.htm
The following are a sampling of commitment contracts and/or Servicer Participation Agreements pertaining to HAMP:
See also: TARP & HAMP Report as of 10-27-10
Cases Of Interest