HAMP: GSE-Insured Loans

MGIC delegates to Servicers modification authorization for insured loans that meet Fannie Mae's or Freddie Mac's HAMP requirements.

Participating Servicers must evaluate all delinquent loans for HAMP eligibility through the following process flow.

1. Eligible loans must be reviewed through a sequence of steps to reach the goal of a 31% housing debt-to-income (HDTI) ratio. This is called the "Waterfall" process.
2. If it is determined through the Waterfall process that a modification will move the borrower(s) HDTI to 31%, the Servicer sets up a Trial Period.
3. A Net Present Value (NPV) test that compares the net present value of cash flows with modification and without modification is performed. Regardless of outcome, if the Waterfall process moved the borrower(s) HDTI to 31%, Step 4 is next in the process flow.
4. The Trial Period will last 90 days (three payments at modified terms) or longer if necessary to comply with investor contractual obligations.
5. If the borrower is current at the end of the Trial Period, the modification is completed.

HAMP Flowchart

View the flowchart for GSE Loans (.pdf)