Hurry Up and Wait on HASP and HAMP Loan Modifications
The New York Times reports extensively today on the slow progress President Barack Obama’s $75-billion Homeowner Affordability & Stability Plan programs are making to forestall as many as 4 million foreclosures by allowing cash-stressed homeowners to get terms of their loans modified.
120 days into the weeds of the programs, it’s a slow go.
Under the plan, the government offers mortgage companies $1,000 for each loan they agree to modify, then another $1,000 a year for up to three years.
Hanging in the balance is more than the fate of individual homeowners. The administration portrays its mortgage program as a crucial piece of its broader effort to restore vigor to the economy. If the effort fails, foreclosures will continue to surge and home prices will probably keep falling, sowing fresh losses in the financial system and threatening to crimp credit anew for businesses and households.
Yet in the four months since the Treasury Department announced the program, millions of new homeowners have slipped into delinquency and foreclosure. For now, progress is constrained by the limited capacities of mortgage servicing companies, said Michael S. Barr, the assistant Treasury secretary for financial institutions. He offered the first signs of the administration’s impatience with the institutions that control home loans.
CNBC sought comment on assessment of the success or lack thereof of the initiatives from James Lockhart, director of the Federal Housing Finance Agency, whose remarks covered not just the mortgage modification efforts but housing’s outlook itself.
The issue is, it’s a large-scale problem without a one-stop-shop solution. The answer is as granular as each case by case loan modification applicant.
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You can get a free Homeowner’s Handbook on President Obama’s “Making Home Affordable” plan at http://MortgageCreditTrauma.com.
This plan outlines the rules and eligibility guidelines for 1st & 2nd loan modifications as well as giving a Loan Comparison Chart for Countrywide/BofA, CitiGroup/CitiMortgage, IndyMac Fed Bank and JP Morgan who is also accepting Washington Mutual and EMC Mortgage Corp customers.
Hope this helps!