What incentives does HAMP provide for borrowers, servicers and investors?
Borrowers, servicers and investors are all eligible to receive financial incentives for successful modifications under HAMP. No incentives are available to any party, however, until after a borrower successfully completes the trial period. Borrowers whose monthly payment for principal, interest, taxes and insurance is reduced through the modification by six percent or more will receive success incentives for making timely payments on their modified loans, including timely payments made during the trial period. For every month the borrower is current and makes a timely payment, the borrower will accrue a principal balance reduction payment equal to the lesser of $83.33 or 50 percent of the reduction in the monthly payment. A borrower can earn up to $1,000 per year in mortgage principal reduction for each of the first five years of the modification. Success payments will accrue monthly, but will only be applied to the borrower’s account annually. If a loan ceases to be in good standing,
