The FHA has several programs designed to help people avoid foreclosure and save their homes. They recently held a training to clarify their policies as the FHA discovered that several banks appeared to be denying HAMP loan modifications to eligible borrowers.
Numerous borrowers have been denied the ability to keep their home where they can afford a reasonable payment and should be eligible for a partial claim to the FHA insurance. The reason the banks give is that the mortgage arrears exceed 30% of the principle balance of the loan. Now, it is true that the FHA partial claim is limited to 30% of the principle balance of the mortgage, but the amounts in excess of the 30% can be capitalized back into the loan or paid off by the borrower.
For more information, please visit the FHA’s Website