The clumsy program, the Home Affordable Modification Program, created in 2009 by the Obama administration, known as HAMP, is now over, as is that administration. Back in 2009, the government, in a nod to help ease the struggling homeowners, created this program to try to help people stay in their homes. Banks and lenders were encouraged to voluntarily participate. Some lenders even created their own programs, modeled after HAMP. HAMP was not a rousing success, with 70% of homeowners being turned down. But, some homeowners got help, and were able to stay in their house longer. Some even got on the right track. For others, the loan modification program only delayed the inevitable loss of their home. While the program had good intentions, it mostly delivered the empty hope of help.
Now, most experts expect the new administration and congress to loosen regulations on banks. And, with that, the lending industry will be given more free reign to create its own standards or programs for modification. It appears that lenders and agencies like Fannie Mae and Freddie Mac are meeting to discuss possible new programs to help reduce payments for borrowers. But, with the foreclosure rate going down to the lowest rate since 2007, there is less pressure to do more for borrowers. See this New York Times article for more details.
What happens next in the new administration is anyone’s guess. But, there’s not a lot of hope that the new programs will be any better than HAMP, and could be much worse, giving even more power to the lenders, with fewer regulations. Stay tuned. If you have questions about your mortgage and your options, call us.
Daniel J. Winter
Offices in Chicago, Gurnee, Oak Lawn, and Skokie, Illinois