When the market crashed the newly elected Obama Administration was faced with the daunting task of patching a sinking ship. There was no single magic bullet that was going to immediately reverse the damage that was inflicted under his predecessors 8 year reign. What the President needed was time to assess all of the contributing factors and begin to implement “CHANGES” that would stop the housing market from a continued downward spiral
Opponents of the (HAMP) Home Affordable Modification Program say that this program was not built for complete success; it was only implemented to stave off the flood of homes that were going into foreclosure. If nothing was done to slow the amount of homes entering into foreclosure the result would have driven home values further into the ground. Allowing borrowers additional time within their homes while they applied for modifications on their loans stopped the flood of foreclosures. The Home Affordable Modification Program halted the foreclosure process on hundreds of thousands of homes.
The complaint by these opponents of (HAMP) is the fact that these “toxic” loans have in many cases no hope for revitalization. There is no sense in putting off the inevitable. A lot of these loans are in default due to the inability of the borrowers to make the monthly payments. With the national jobless rate reaching 10% many Americans are faced with mortgages that they just can’t afford any longer. In better times homeowners were able to draw emergency cash out of the equity in their homes to carry them through financial crises such as sudden unemployment, but with home values plummeting many of these loans are “upside down”; meaning that they owe more than the home is currently worth.
The Home Affordable Modification Program has treated pre-foreclosures like a pin ball game. A distressed loan enters the processes and gets bounced around for awhile, but inevitably there is only one way out. Currently only 31,000 loans have made it all the way through The Home Affordable Modification Program to permanent modification. Economists report that 5 million Americans have already lost their homes, and before all is said and done another. 13 million are expected to suffer the same fate. The amount of borrowers that made it to permanent modification translates to 0.0062% effectiveness of the program. Was this the best that our elected officials can come up with? Or was this program nothing more than a ruse by the government disguised as a life jacket for drowning Americans, when in all actuality it was only intended to slow the landslide of foreclosures until the market had some time to heal its self leaving these desperate homeowners out in the rain.
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I’m happy for the home owners this really did help, but for the other 99.9% of home owners that is didn’t their time would have been better spent looking for another job. This was just another smoke and mirror scheme by the current administration.
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