Loan Modification

HAMPs Loan Modification Has Finally Got Moving

By Andrew

The HAMP program has finally started to get some momentum and provide a substantial amount of troubled homeowners with a way out of foreclosure. Unfortunately, this help seems to be too little, too slow, and too late. However, one must accept that steps are being made and that although not all targets have been met, significant progress is finally occurring.

Let?s look at the hard data.

-       After over a year since the program started 168,000 households now have permanently modified mortgage. This represents an increase of over 50,000 from January 2010 and 100,000 from December.

-       There 92,000 trial modifications in the final stages before a permanent modification. According to Treasury the average saving for each homeowner is around $500.

This is good news, and it is certainly a help to those that have been fortunate enough to benefit from it. However, the truth is that it is a drop in the bucket when compared to the 6 million + troubled homeowners that are behind in their payments and are at risk of foreclosing on their mortgages.

When the program started it was hailed as the most aggressive plan the Government was enacting to control the housing crisis. Over a year later only a million people have entered the program, a far cry from the four million households the program set out to help.

A words batter has started over these claims. The Treasury is now claiming the goal was to provide help to 4 million homeowners not make sure they actually got it. If you accept this interpretation, HAMP is between 35 to 45 percent of the way to achieving its goal. Of course, critics claim that the Treasury is simply moving the goalposts.

What is even more worrying is how the borrowers that enter the program are being treated. Valparaiso University School of Law carried out some interesting research on the HAMP program and discovered that although 66% of all borrowers in the trial stage made all their payments, less than 25% have received a permanent modification to their mortgage. The reason for this is lack of paperwork and the loan modification limbo created by the complex and lengthy red tape.

Nevertheless, the Government remains confident, and a Treasury Department spokeswoman has claimed the rate of loan modification completions will rise in the next few months.

Another scary fact is that the number of people entering the program is actually slowing down. In February 73,000 signed up, which represents only half the number of homeowners that did so in October and November.

In conclusion, although the Government is starting to make a substantial dent in the number of homeowners it is offering help to; it is a far cry from the objectives the program set out to meet.

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1. Loan Modifications Latest Figures, Limbo, Trial Purgatory And Other Horror Stories
2. Loan Modification Success Report, The Truth Is Far Worse
3. The Obama Loan Modification Plan, An Overview

1. Loan Modifications Latest Figures, Limbo, Trial Purgatory And Other Horror Stories
2. Loan Modification Success Report, The Truth Is Far Worse
3. The Obama Loan Modification Plan, An Overview

Full post as published by Blown Mortgage on March 17, 2010 (boomark / email).