Seminole County Foreclosure Attorney & Short Sale Realtor News–HAMP Program Could End

In recent Seminole County foreclosure attorney and short sale realtor news, a report released in January shows that the Home Affordable Modification Program, or HAMP, has made very little progress in reducing the number of foreclosures, as the many pending Seminole County foreclosures and short sales show. A previous blog post of mine talks about how the HAMP foreclosure prevention program works. You can also read the entire Wall Street Journal article on how HAMP has not been that great at reducing foreclosures. Only one in four of the 2.7 million homeowners who applied for help under HAMP actually received a loan modification that reduced their monthly payments. The other 75 percent? They are out of luck.

Republicans announced Monday that they are considering a bill to end the HAMP program. Rep. Spencer Bachus is quoted as saying, “In an era of record-breaking deficits, it’s time to pull the plug on these programs that are actually doing more harm than good for struggling homeowners.” A treasury spokesman countered that the proposed legislation “would close the door to struggling homeowners seeking relief in the face of the worst housing crisis in generations.” The Obama administration pledged to put $75 billion toward the HAMP program, but to date only $1 billion has been used to help struggling homeowners.

The program’s lack of success is largely due to government red tape, lack of oversight, and bank mistakes and screw ups. About 2.7 million homeowners applied for HAMP assistance. Almost half of the homeowners who applied for HAMP did not qualify for the program to start with, and an additional one-quarter were disqualified after being initially accepted into HAMP. To break it down into actual numbers, of the 2.7 million applicants:

About 266,000 applicants were denied due to incomplete paperwork or forms lost by mortgage companies.
About 255,000 were ineligible for the program because they had an “affordable” mortgage, even if they were struggling to pay their bills in addition to their mortgage, or the loan amount exceeded the HAMP guidelines.
About 770,000 homeowners started the program, but were later disqualified, mainly for the same paperwork and eligibility issues discussed above. Very few of this number were disqualified for failing to make their trial payments on time.
In the Southern region, approximately 80 percent of homeowners who applied for HAMP assistance failed to complete the loan modification process.