HAMP Gets an Extension
The federal government established the Home Affordable Modification Program to ease restrictions on extending credit to help American homeowners who were struggling with debt in the failing economy. The HAMP Program’s sole purpose was to offer home loan modifications to homeowners to avoid foreclosure.
When the program was introduced in 2009, approximately 12 million homeowners were upside-down on their mortgages— owing more on their loans than the market value of the home. There was a serious credit crisis and the housing sector needed a boost. HAMP offered a simplified credit process for loan modifications that intended to reduce the homeowner’s monthly payment by extending the life of the note, lowering the interest rate or both.
Although there are signs of recovery in the housing market, too many people remain delinquent on their mortgages. The number of people holding upside-down mortgages dropped to seven million in 2012 and, according to reports by JPMorgan, they could continue to fall down to four million by 2015.
Unfortunately, HAMP has not been as successful as Congress anticipated. To date, only 2 million modifications through HAMP have been tried and the Department of Treasury has considered just 1.1 million of those as successful enough to be declared permanent. Therefore, the Obama administration announced a two-year extension of the HAMP program with some changes to encourage lenders to accept more HAMP applications.
What’s new with HAMP?
In general, the new HAMP qualifications offer the following changes:
- Relaxed proof of income requirements
- Additional sources of income permitted
- Fewer documentation requirements for the lender/servicer
- Ability to re-apply after receiving a previous HAMP application denial
These new changes mean that homeowner won’t be inundated with as much paper work and lenders will have fewer hurdles to cross for loan modifications to meet the approval of the Treasury Department.
While all of this sounds promising, government programs trypically do not work out as Congress hoped or intended. Harold Shepley & Associates is a full service debt relief law firm that can help you fight through the red tape to get the results you desire.
For more information about HAMP and other loan modification programs contact Harold Shepley & Associates. All you have to lose is your debt.
September 6, 2013 Posted in Mortgage Modification Tagged HAMP, loan modification, loan modification attorney, loan moficiation programs, mortgage modification Leave a comment
