How much do I have to make to have a 600000 house?
Good question. Unfortunately, there are too many unanswered variables that would determine how much house you could afford and what the payment would be. That's why no one has provided any numbers for you in their answers. Some variables to consider: down payment, credit score, income, debts, others. ...

how does one apply for a HAMP loan
Good question. Here's something to consider:If the loan is owned by FreddieMac or FannieMae and was closed prior to JUNE 1, 2009, your son may be eligible for the Refi Plus program no matter what the value of the home is.Your best bet is to take a look at the Home Affordable Mortgage Program at this...

do I have to have a lender in the same state that I buy a house in?
The professionals above are correct. You just need to go with a lender that is licensed in that state. Good question.-Conor Suttonwww.csloansolutions.com

Do you all think that the rates will continue to drop of should we lock our rates this week for a refi?
Lock it in! Conservative thinking says rates are more than likely to increase before they decrease. Rolling the dice on rates falling only has upside if you're right. If you're wrong, you just cost yourself money in the long run. Rates are still low enough that locking in now is beneficial. Hope that helps.

purchasing a house when 1 hasn't sold
Great question and interesting scenario. The good news is $40K isn't that much to borrower in the overall grand scheme of things when looking at purchasing a house. The not-so-good-news is that most conventional wholesalers have a minimum amount that they will borrower on and your $40K is below that...