Obama Extends Foreclosure Prevention Program Aid
The Obama administration will be expanding eligibility requirements for its foreclosure prevention program, the Home Affordable Modification Program (HAMP), to help more struggling home owners participate.
The program will expand its eligibility requirements for those who may qualify for a loan modification, including how the debt ratio of mortgage borrowers is calculated as well as extending the program to owners of rental properties too.
HAMP will also triple the incentives it pays banks in order to get more banks to reduce the principal on loans, and it would offer incentives to Fannie Mae and Freddie Mac to reduce loan principals for those who participate in the program (previously only private lenders and banks were eligible for the incentives).
However, the Federal Housing Finance Agency, which oversees Freddie and Fannie, says that while it will consider the HAMP changes, in a recent analysis it found "that principal forgiveness did not provide benefits that were greater than principal forbearance" -- a possible sign the GSEs may not support reducing the mortgage principal on loans, housing experts speculate.
HAMP was first launched in 2009 and set out to help some 4 million struggling borrowers modify their loans, yet it has fallen short from its original goal. To date, HAMP has helped fewer than 1 million home owners.
Some housing experts are optimistic that the changes to HAMP will allow more home owners to take part in the program, and that HAMP will help more “responsible home owners lower their costs and stay in their homes," Gene Sperling, the director of the National Economic Council, at a press conference.
The new changes to the program will take effect at the end of April. Also, the program has been extended to December 2013.
Comment
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Comment by Robert J. Schlesinger on February 1, 2012 at 10:13pm -
What about non Fannie Mae and Freddie Mac Borrowers???
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Comment by Sal Perez on January 31, 2012 at 8:02pm
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In Judicial states like Florida, many home owners are fighting back the banks. Attorneys are having lots of business with more or less success stories, depending on the bank and the owner circumstances. Most of the time the owner loses and the property ends up in foreclosure or short sale. I believe a well defined and agiled program allowing short sales is what makes sense. Let every buyer willing and financially able to purchase them at market value.
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Comment by Brent Link on January 31, 2012 at 12:36pm
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It is no doubt they have helped only a few. If the expenses are anywhere near 70% of their income, they do not qualify. Why would they be behind if they had enough money to pay their bills?
They also have a chart to tell you how much you spend a month on food. I could feed 3 families on the amount the governemnt calculates for groceries.
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Comment by Renata Lewis on January 31, 2012 at 12:06pm -
How about the owners holding a private mortgage? HAMP does not apply.
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Comment by Lori Dillick on January 31, 2012 at 10:58am
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In my area short sales and foreclosures are the name of the game. I receive 200 short sale possibes each month for my county alone. If you are not working with them, you are not working.
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Comment by M. Parrish Walker on January 31, 2012 at 10:53am -
The problem is banks cooperating with Realtors to make the short sales actually happen in my opinion. Some are great, but most seem to have no interest in doing anything but making it difficult and eventually foreclosing. In my area there has been a mass exodus of agents willing to handle foreclosures because we are working hard to put deals together that the banks either won't approve or take so long to approve that the Buyer finds something else and then the bank forecloses. All of our time, marketing expense, and effort is a total loss. I personally am tired of spinning my wheels by working on these harder, more frustrating and time-consuming contracts that end with a disappointed homeowner, a disappointed buyer, and no compensation for my effort.
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