HAMP – not your only option! If your home is worth less than what you owe, you may be eligible for a Principal Reduction Alternative (PRA). To be eligible for PRA, a home owner must be delinquent or foresees a potential delinquency, the home must be borrower occupied and the mortgage payment must exceed 31% of the home owner’s gross monthly income. If you qualify, the principal balance on your home will be reduced to the home’s current market value. A HAMP, ‘in-house’ or traditional modification will modify the interest rate and terms of the original mortgage, but will not reduce your principal balance even though your home is under water. Therefore, before you submit a PRA request to your lender, CMO Law Group encourages that you seek legal advice from an attorney well versed in this area!