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Unofficial independent open source [GPL] estimator/calculator for HAMP loan modifications using modification procedures described in documents made public by the US Treasury.
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documents Updated set of public documents
README
TVM.js
UnofficialHampLib3.js
gpl-2.0.txt Initial distribution of v2.5 Beta
gpl-3.0.txt
jquery.jqplot.css Initial distribution of v2.5 Beta
jquery.jqplot.min.js
license.html
skin.html Initial distribution of v2.5 Beta
style.css Initial distribution of v2.5 Beta
underscore-min.js Initial distribution of v2.5 Beta

README

Unofficial HAMP Calculator
(c) Dr Paul Brewer 2010, 2012-
License: Free Software Foundation's General Public License (GPL) version 2
or any later version of the FSF General Public License

Please note that the License to use the software contains a warranty disclaimer
so that THERE IS NO WARRANTY FOR THIS SOFTWARE and ALL USE IS AT YOUR OWN RISK. 

Such a disclaimer is common industry practice with respect to free software.

Note:  Dr Paul Brewer is an independent economist and did not work
for the United States Government or any bank during the creation of this
software.  Also, no government or bank officials were involved in the creation
or testing of the software.  The algorithms involved are worthy of independent
study, and the Unofficial HAMP Calculator represents such an independent study.

GENERAL BACKGROUND
During the recent credit crisis and recession in the United States, many
families were unable to make payments on their home loans.  Some borrowers
strategically defaulted because in some parts of the United States
a loan is non-recourse, the home value had dropped 30% or more, and the only
collateral for the loan was the property itself.  Most, however, were victims
of the economic recession, or unexpected expenses such as medical bills, or
unable to refinance a subprime high margin adjustable rate loan.  The
investors in these loans, such as the GSEs Fannie Mae and Freddie Mac, Banks,
and other large investors, normally expected only a small fraction of the
loans to default. Usually a defaulted loan results in a foreclosure or
short sale.  With the number of loans affected, the government decided
to intervene in the marketplace.   

In response to these developments the government created the Home Affordable
Modification Program (HAMP), which details a specific algorithm to modify
an existing mortgage.

The full details of this algorithm are beyond the scope of this version
of the README file.  


AN INTRODUCTION TO THE HAMP ALGORITHM

Keep in mind that this is only one version of the procedure, and not
the whole procedure.  The policy must be considered as subject to change.

0. The goal of the HAMP program is to lower the loan payment to (31%) of gross 
income in cases where hardship in making the payments can be
established.  

First, various costs are added into the loan.  These are things like
unpaid accumulated interest from the period where the loan was unpaid.

[In the case of principal reduction, the principal reduction occurs
here, before the 2nd and 3rd steps.  If the principal reduction is
more than 5% of the Unpaid Balance, the second and third steps can
be reversed (Lender's Variation)]

Second, the interest rate of the loan is reduced, to as low as 2% by
0.125% steps, to attempt to meet the goal payment level.

Third, the length of the loan is increased to as much as 40 years.

Fourth, a balloon payment of non-interest bearing principal is created.
This is called "principal forebearance".  The investor can also choose
to forgive some of this principal, but is not required to.  

UNOFFICIAL CALCULATOR IMPLEMENTATION AND USAGE

The calculator uses the  folowing javascript extension libraries 
written by others:

JQuery (no copy needed, html includes the Google public CDN copy)
Underscore.js (copy provided, distrubuted under the MIT License)
JQPlot (copies provided, distributed under the GNU GPL v2 License)

The skin.html file contains the "skin" of the calculator.  If you want
to test your download of the calculator, open "skin.html" in firefox
or google chrome.

The UnofficialHampLib3.js file contains the Javascript program code to implement
the calculator. 

The TVM.js file contains a library of mathematical Time Value of Money and
Loan functions.

I am making these files available under the Free Software Foundation's 
GNU General Public License version 2.0 (or any subsequent version of the license
as released by the Free Software Foundation). However, that does not mean anyone
can do anything with the files.  Please read the license to understand
what is permitted. For example, you may NOT modify this calculator and turn
the result into proprietary software where you control who can further
modify it or redistribute it or see the source code.  That an
example of something not permitted. For full details, see the license.

CONTACT INFORMATION

GMAIL drpaulbrewer if you are interested in assisting with expanding
the calculator, adapting it for your purposes,  or perhaps partnering
on some related application with the Unofficial calculator as a throwaway
prototype.  

I believe people have a right to get independent information about
how their mortgages may be modified and I have a website, ArmDisarm.com, 
devoted to benevolent entrepreneurship in this area.





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