Home Affordable Modification Program or HAMP is getting an extension as well. HAMP's expiration date has been extended one year, till the end of 2013, the Treasury Department announced recently. Treasury announced other changes, listed below:
Treasury will pay Fannie Mae and Freddie Mac for forgiving principal on mortgages they own. Fannie and Freddie don't offer principal reductions, according Treasury's Timothy Massad. No word on how much these incentive payments would be; certainly they would be partial. For example, Fannie might be paid $5 for every $100 it forgives. It's not a lot, but maybe it beats foreclosing.
Treasury will triple the incentives it pays to investors besides Fannie and Freddie. They'll be reimbursed with anywhere from 18 percent to 63 percent of the amounts they forgive.
Modification guidelines will be relaxed to take into account debt such as medical bills and home equity loans.
Houses occupied by renters will be eligible for HAMP modifications.
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