subject: What's the 4-1-1 on U.S. Government's Efforts to Help Homeowners Avoid Forcelosure? [print this page] What's the 4-1-1 on U.SWhat's the 4-1-1 on U.S. Government's Efforts to Help Homeowners Avoid Forcelosure?
In February 2009, the Obama Administration introduced a comprehensive Financial Stability Plan to address the key problems at the heart of the current crisis to get our economy back on track. A critical piece of that effort is Making Home Affordable (MHA), a plan to stabilize the housing market and help struggling homeowners get relief and avoid foreclosure.
The Home Affordable Modification Program (HAMP) provides eligible homeowners the opportunity to modify their mortgages to make them more affordable.
The Second Lien Modification Program (2MP) offers homeowners a way to modify their second mortgages to make them more affordable when their first mortgage is modified under the Home Affordable Modification Program.
The Home Affordable Refinance Program (HARP) gives homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac an opportunity to refinance into more affordable monthly payments.
The Home Affordable Foreclosure Alternatives Program (HAFA) provides opportunities for homeowners who can no longer afford to stay in their home but want to avoid foreclosure to transition to more affordable housing through a short sale or deed-in-lieu of foreclosure.
The Home Affordable Modification Program (HAMP) was introduced in March 2009. November 30, 2009, US Treasury Department created the HAFA Program (Home Affordable Foreclosure Alternatives Program) for those borrowers who do not qualify for HAMP. December 31, 2012 is the HAFA Program expiration date.
HAMP was launched to give mortgage servicers an incentive to modify mortgages on the verge of foreclosure. The "Main Street" goal of the Treasury Asset Relief Program (TARP) via HAMP is "preserving homeownership". However, the "Special Inspector General for TARP said many of HAMP's goals have been largely unmet."
Treasury Department released updated guidelines December 28, 2010, effective February 1, 2011, in response to complaints, with the intent to hopefully make the HAFA program work more efficiently. The main complaints were failure of lenders to comply with HAFA timelines and general rules, and also a lack of uniformity in guidelines for all HAFA programs.
March 2011 Update
As of March 2011, the House Financial Services Committee is deciding whether to keep or scrap all four programs of the Obama Administration's foreclosure-aid programs before the expiration date. The major criticisms now being that they are "just ineffective", not "a good use of our resources", "just a waste of taxpayer money" and there's no point "funding programs that don't work with money we don't have".
Despite opposition, Treasury Department officials believe ending the federal programs is not wise and state that 1.4 million borrowers are currently eligible for HAMP, although this number might be overestimated. An FHA representative testified that the cooperation needed from the lenders is finally underway and now is not the time to eliminate the refinance program. Several FHA approved lenders are looking into effective ways to make loan modifications affordable for homeowners, such as, principal write-downs. There is every indication that the program's intended purpose will be accomplished. Why end it now?
On the other hand, the TARP Inspector is so opposed to HAMP, he submitted his resignation. One of the reasons for his resignation was that the HAMP was supposed to help prevent 4 million homeowners from going into foreclosure. Only 682,000 households had been helped through the third quarter of 2010. Spencer Bacchus (R-Alabama), Chair of the committee, insists these programs are "doing more harm than good for struggling homeowners". Thus, the House Financial Services Committee continues their "chopping block" efforts, voting to push bills forward to the House of Representatives. But according to the HousingWire, all that hard work to terminate the programs is in vain, as the President will veto the bills if they make it to his desk.
The HousingWire.com is a reliable information source for staying current on HAMP, HAFA, HUD and almost any financial news impacting the mortgage market.
View sample of HousingWire posts tagged "HAMP":
New CoreLogic tool automates the decision-making in loan mods
Thursday, March 24th, 2011
Analytics firm CoreLogic (CLGX: 18.05 +0.45%) rolled out IntelliMods Thursday, a new Web-based application that aims to expedite the loan modification decision-making process.
Mortgage modifications benefit investors more than tests find: CRL
Wednesday, March 23rd, 2011
A study from the Center for Responsible Lending, a consumer advocacy group, showed more mortgage workouts benefit investors than current modification numbers show.
Bill would provide HUD grants for foreclosure mediation
Friday, March 18th, 2011
A congressman from Tennessee introduced legislation that would provide grants from the Department of Housing and Urban Development to states and local governments to provide mediation for homeowners facing foreclosure.
Republican senators join fight to end HAMP
Friday, March 18th, 2011
Three Republicans submitted a bill in the U.S. Senate that would end the Home Affordable Modification Program, a companion to a bill that is scheduled for a vote in the GOP-controlled House of Representatives next week.
