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Homeowners left stranded by government’s HAMP

A year and a half after the Obama administration unveiled a sweeping rescue plan for homeowners, surprisingly few have been rescued.

The $275 billion “Making Home Affordable” program had the potential to reach up to 9 million troubled homeowners, according to initial estimates. Instead, paperwork delays, confusion over eligibility requirements and hesitance of banks to participate has left millions out in the cold.

  • Just 24% of borrowers eligible for a federal mortgage-modification program have received permanent mortgage modifications. While 1.6 million homeowners were eligible as of the last report, more than half a million had abandoned the program, seeking other solutions or falling victim to the housing market’s collapse.
    YOU must be the squeaky wheel to get action. The best way to do that is to follow the steps I give in my Blueprint To Avoid Loan Modification Hell Special Report. If you have not requested your copy yet, watch the brief video to see what’s inside and fill in the box. CLICK HERE NOW
  • Since its inception in February 2009, nearly 6 million homes have received foreclosure filings, according to RealtyTrac—despite a foreclosure-moratorium that predated the program and lasted through March.
  • In desperation, homeowners have handed millions of dollars to shysters promising fast-track solutions. No less than five federal agencies and attorneys general in more than 30 states have taken action against thousands of such individuals. Yet the government response has been uncoordinated and unhelpful to those who most need assistance.
  • The number of eligible borrowers to be far shy of the administration’s initial targets. Just 1.6 million borrowers now qualify for the most high-profile prong of the broader federal program, called the Home Affordable Modification Program, or HAMP. Others have been excluded because properties are vacant, or because owners earn too much money, don’t owe enough money or haven’t seen home values plunge far enough.

The banking industry has taken a woefully long time to help its customers. Yet solutions implemented by the industry have been more effective than the government’s: 89% of homeowners who have gotten permanent modifications have done so through banks’ proprietary programs.

The complexity and haphazardness of the mortgage-modification process has already frustrated millions of homeowners across the country. The backlog of homeowners requiring assistance has climbed as unemployment remains stubbornly high. False starts have threatened the progress of an economic recovery that now appears to be dangling by a thread.
1st in a series

Technorati Tags: money, economy, loan modification, mortgage modification, hamp

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  4. Government agencies set new HAMP guidelines on documentation
  5. Borrowers in HAMP program rose by only 1-percent from a month earlier

Tags: economy, HAMP, , money,

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2 Responses to Homeowners left stranded by government’s HAMP

  1. Scott on 04/01/2011 at 13:38

    I think it all boils down to the economy. Even with the supposed help to homeowners, the housing market still sucks and people don’t have the disposable income to spend on buying a new home.

  2. Jim Collins on 04/02/2011 at 17:28

    Despite all the fanfare, HAMP has been a pretty miserable failure. One of the main reasons is because servicers have not been helpful. When they look at a mortgage and determine that they will make more money from a foreclosure than a modification because of the HAMP rules, no way the home owner is going to win.
    The administration is now (finally) looking at ways to get around this problem. Expect any solution to involve paying these guys more tax money.
    The best solution for a homeowner trying to get a modification is usually to get legal help. Lawyers know all the ins and outs and won’t let banks take advantage of you.

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