Treasury Updates HAMP Guidelines, Might the Program Work Now?
HAMP considered a failure
It has been a rocky road for the Obama Administration as their Home Affordability Modification Program (HAMP) comes under fire as the economy continues to sink. HAMP is a $75 billion program designed to lower borrowers’ monthly payments by reducing mortgage rates and extending loan terms.
A year after the launch of HAMP, only 750,000 of the projected 3 to 4 million borrowers have completed the application, and only 7% (65,000) of those signed up have actually completed the program, causing some to call the program a failure, according to the Star Tribune.
HAMP is said to lower borrowers’ credit scores and because paperwork was being lost and delayed for HAMP applicants, the White House sent “swat” teams into mortgage servicing offices to oversee the process, meanwhile Representative Barney Frank opined that the process had him “terribly frustrated” back in December.
Treasury Department “stepping it up”
This month, the Treasury Department (which oversees HAMP) vowed to “step up efforts” with HAMP which presumably begins with the recent announcement that they have issued new guidelines to help the HAMP program become more effective.
These new guidelines mean that at the time of application, borrowers must present three things:
- a form requesting a loan modification
- authorization for the servicer to get tax information from the IRS (rather than borrowers providing copies themselves)
- evidence of current income, such as two recent pay stubs
The Treasury is noting that by not just taking borrowers’ word (that their finances are in order, or that loan servicers will collect the paperwork in a timely manner) is no longer good enough and that the process will not begin until all three items are complete.
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This article published on Wednesday, February 3rd, 2010 at 12:03 am | Contact the editor
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AGBeat Editor-in-Chief: Lani, named one of Real Estate’s 100 Most Influential, as well as 12 Most Influential Women in Real Estate, is a business writer hailing from the great state of Texas in the city of Austin. As a digital native, Lani is immersed not only in advanced technologies and new media, but is also a stats nerd often burried in piles of reports. Lani is a proven leader, thoughtful speaker, and vested partner at AGBeat.
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- A Staggering 18.9 Million Homes in U.S. Are Currently Vacant:
[...] more homes will be lost despite the Obama Administration’s attempts (through what some call a failing program known as HAMP) to help sinking homeowners. Others forecast that we are currently bouncing at the [...]
- Real Estate Feeds:
Treasury Updates HAMP Guidelines, Might the Program Work Now?: HAMP considered a failure
It has been a rocky road … http://bit.ly/ahMssT - Top 10 real estate posts of the day for 2/3/2010 : Tempe real estate and free home search:
[...] Treasury Updates HAMP Guidelines, Might the Program Work Now? – So HAMP was a failure, and these new guidelines should streamline the failure in the future to [...]
- realdiggity:
Treasury Updates HAMP Guidelines, Might the Program Work Now?: comments http://bit.ly/98g19y
- AgentGenius:
#agnow "taking borrowers' word" ROFLMAO ! …..and we arrived at this conclusion HOW? Thanks Lani! I'll be gigg… http://bit.ly/91V3Q2
- AgentGenius:
#agnow [...] Treasury Updates HAMP Guidelines, Might the Program Work Now? – So HAMP was a failure, and these new… http://bit.ly/91V3Q2
- AgentGenius:
#agnow You caught that, did you? So, it's not the Treasury Departments' fault that HAMP is failing, losing paperwo… http://bit.ly/91V3Q2
- Marki D. Lemons:
Treasury Updates HAMP Guidelines, Might the Program Work Now? If not we have HAFA. Something has to work. http://ow.ly/14SEQ
- AgentGenius:
#agnow As a participant in the HAMP program, I can only give you the "why" I applied for the program, and the likel… http://bit.ly/91V3Q2
- The Ten Best Articles in RE.net This Week: Feb. 6, 2010 Edition:
[...] 4) Treasury Updates HAMP Guidelines, Might the Program Work Now? – So HAMP was a failure, but now we are going to have new HAMP guidelines which should make the process of failure much quicker. When can we stop with all this feel-good bs and get down to something that would really work to fix the housing crisis. [...]
- AgentGenius:
#agnow [...] 4) Treasury Updates HAMP Guidelines, Might the Program Work Now? – So HAMP was a failure, but now w… http://bit.ly/91V3Q2
- Obama Announces $1.5 Billion in Housing Aid – Oh Really?:
[...] fund piggybacks the existing $75 billion Home Affordability Modification Program which has been called a colossal failure on all sides of the aisle. The Associated Press reports that only 12% of applicants have been [...]
- AgentGenius:
#agnow [...] fund piggybacks the existing $75 billion Home Affordability Modification Program which has been called… http://bit.ly/91V3Q2
- AgentGenius:
#agnow The program won't work until the requirements allow the formula to be this:
(1st mortgage + 2nd mortgage + … http://bit.ly/91V3Q2
Benn Rosales
Conal Campbell
Elijah May
Lani Rosales
Tara Steele
Marti Trewe
Charlene Jimenez
“taking borrowers’ word” ROFLMAO ! …..and we arrived at this conclusion HOW? Thanks Lani! I’ll be giggling about this one the rest of the day!
Navy Chief, Navy Pride
You caught that, did you? So, it’s not the Treasury Departments’ fault that HAMP is failing, losing paperwork, etc., it’s the BORROWERS’ fault for fudging numbers. I wonder if the Treasury is saying the several hundred thousand who have not gotten help that ARE eligible are not helped by the program because their paystubs aren’t in?
Another case of “it’s not our fault.”
Additionally, why would this NOT have been the policy in the first place, it reeks of no-doc-subprimes that weakened the market to begin with!?!?
Looks like Congress wants some answers from Geithner on why HAMP has failed.
oversight.house.gov/images/stories/Correspondence/2-4-10-Honorable_Timothy_F._Geithner-Secretary-Dept_of_the_Treasury-Mortgage_Modification_Program.pdf
As a participant in the HAMP program, I can only give you the “why” I applied for the program, and the likely end result. The reason boils down to unfunded mandates. I own an owner occupied 3 family house, that I bought 6 yrs ago. My mortgage at the time was $1300. Within the first 2 years a federal law was passed which persuaded me to get an equity loan to make my home lead safe, next the variable equity rate jumped, I refinanced. After property re-evaluation in 2007, my taxes went sky high, the mortgage now was $1900. I was now paying the same as my tenants to make the monthly mortgage payment. I dropped my health Ins. to help keep the costs in balance. Then in 2009 FEMA re-mapped the US, and now classified my home as being in a high risk flood zone. As I was challenging FEMA, the mortgage co. forced the flood insurace and increased my monthy payment, now the payment is $2488. At this point I applied for HAMP. Just a few days ago , My mortgage co. notified me that I was denied , and suggested a short sale or deed in liew of foreberance. I reviewed a local real estate internet site, and then found my home is about $90k less than my mortgage balance, not the mere $15K the mortgage company reported my BPO as being. I have documented most of my convervations with the mortgage company, and experienced several imcompetents, and requests for documentation that had been previously acknowledged as in the system , as they were quoted back to me as proof that they indeed were there all a long.
My gut feeling is the bank was just playing along because the treasury dept had some control over them while they were using taxpayer money, but when the treasury was paid back, the banks had little incentive to take the modifications seriously. Too bad for the bank, if they approved the modification, I would have been providing money to the bank with interest for another 30 yrs, but now they will likey end up with a deed on a house that has $90k negative equity, is 100 yrs, old( lead contaminated-lead safe) and is now in a FEMA hight risk flood zone.
The program won’t work until the requirements allow the formula to be this:
(1st mortgage + 2nd mortgage + taxes + insurance + home owners association fees) equal less than or equal to 31% of gross income. As it stands now, only the first, not the first and second are included. People got into financial distress due to interest only 1st mortgages, which have low payments. The problem is the SECOND mortgage… Until this is addressed, very few people qualify for HAMP. And if they don’t qualify for HAMP for the 1st, the 2nd mortgage company will not play ball….
You are absolutely right on this post. We did qualify for the HAMP on our first loan. We also applied for a HAMP on the second at the same time, that was 6 months ago, and the second states they cannot approve the HAMP / CHAMP until the state sends them a letter stating that our HAMP was approved for the 1ST.
On the 13th of June we received a letter from the 2ND that they are going to start forclosure proceedings in 32 days unless we get paid current. Yes, we even had a Chapter 7 Bankruptcy and the 1ST is upside down, they want to take our home?
Can anyone tell me exactly who we can contact to get assistance with this matter? The 2ND is not "playing ball" with the HAMP, and yes, they received TARP money.
Thanks