Home Loan Modification Program Ends

Home Affordable Modification Program, (HAMP) a program created by the Obama administration to help struggling home owners keep their houses, came to an end in December 2016.

On one hand, consumer advocates were not thrilled with the program, as many felt it did not go far enough to help home owners in trouble nor did it hold financial institutions accountable for their actions in contributing to the housing crisis.  However, as Republican held Washington has no intention of replacing the program, many financial institutions are now saying that they are ready to present their own foreclosure-prevention programs, based on what they learned from HAMP.

 “There’s tremendous public good in having an industrywide approach,” said Justin Wiseman, the director of loan administration policy at the Mortgage Bankers Association, a trade group. “No one wants things to revert to what we had before.”

However, as the mortgage industry created the need for such a program in the first place and were also responsible for many of the shortcomings of the HAMP program, many advocates have good reason to be skeptical.

Under the now defunct program, nearly 70 percent of home owners who applied for home loan modifications were turned down, with only 1.6 million homeowners getting to the point of having their loans permanently modified — which was less than half the number the program was intended to help. Meanwhile, nearly 14 million homes went into foreclosure, according to Attom Data Solutions, which tracks foreclosure filings.

 “Payment reduction, more than anything else, matters the most in making a modification successful,” said Wiseman of the Mortgage Bankers Association. “It sounds like the most obvious thing in the world, but it took us six years of data and research to get there.”

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