Q: I was approved for HAMP and accepted it in 2010. However, my mortgage rate is still high. Can I reapply to see if my interest rate can be lowered?
A: Generally, your permanent loan modification under HAMP is a one-time offer. For the purposes of your modification, the terms of your loan were modified to make the payment affordable, usually down to a 31 percent debt-to-income level. As such, tweaks and changes to your loan terms--lengthening the term out to 40 years, changing the interest rate to as low as 2 percent and other methods--were used to bring your payment in line with that DTI standard.
It is true that the interest rate may still be above market-based rates, especially since rates have declined a fair bit since 2010. If you have been making your payments on time for a couple of years now and your credit is back up to snuff you might be eligible for a traditional refinance.
It is technically possible to get another HAMP modification. However, those aren't a "re-modification" per se, but rather a second chance for borrowers who have failed out of an original HAMP modification and a period of least 12 months since the original modification has passed.
These are HAMP 'Tier 2' modifications.
If your servicer was one of the large companies who signed off on the recent $25 billion servicing settlement, they may (or may not) have a new or different program outside of HAMP for which you may qualify. It never hurts to ask!
A 25-year expert observer of the mortgage and consumer debt markets, Keith Gumbinger has been cited in thousands of articles covering a wide range of consumer finance and economic topics in outlets ranging from the Wall Street Journal to the Bottom Line newsletters. He has been a featured guest on national broadcasts for CNN, CNBC, ABC, CBS and NBC television networks and has been heard on NPR and other national and local radio programs. Keith is the primary researcher and writer for HSH.com's MarketTrends newsletter and has authored or co-authored a number of consumer guides on mortgages, home equity, refinancing and more.