It is estimated that over 2 million Americans lost their homes in 2009 to foreclosure. That staggering number is expected to climb in 2010. Since the housing market crash some 4+ years ago over 5 million homeowners have been forced into foreclosure. A report filed by The Center for Responsible Lending estimates that an additional 13 million Americans will suffer the same fate over the next 5 years.
The Obama administrations response to this national financial disaster was to create a home loan modification program in the form of (HAMP) Home Affordable Modification Program. The creation of this program in February of 2009 was intended to lend refinancing assistance to homeowners that were on the verge of loosing their homes to foreclosure. This program had the financial backing of the Treasury Department. Funds were allocated by the administration totaling $75 billion dollars.
The intent of this program was to redefine restrictive and expensive loans that millions of Americans were given during the sub-prime heyday. Making simple adjustments like; setting a fixed rate, lowering the interest rate, and clearing past fines and fee’s that borrowers incurred due to delinquencies would have sent millions of Americans a rescue line and allowed them to remain in their homes. The simplicity of this programs mission statement has become mired in bureaucratic red tape and unrealistic regulatory guidelines, and it is just not doing what it was intended to do.
As stated approximately 5 million Americans have currently lost their homes, while another 13 million are expected to suffer the same fate. Recent reports show that 3 million Americans have tried to receive modifications on their home loans; of those 3 million only 760,000 qualified to enter the program, and of those 760,000 only 31,000 have had their home loans permanently modified. What it boils down to is the Obama administration pledged $75 billion dollars to help hurting Americans stay in their homes, and after all is said and done they have only helped what amounts to full attendance at a NFL game.
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You hit it right on the nose when stating that the program has become mired in bureaucratic red tape. What a shocker. And when the private sector attempted to help with loan mods it was probably the same crooks who helped people get into the no-doc adjustable rate negative amortization programs in the first place, and they wanted to be paid thousands in fees to help! Only in America.
I’ve actually met someone that saved their home through this program. Sadly, it seems the program is just a drop in the bucket. Its going to get worse before it gets better.
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Government bureaucratic is always to slow and complicated, to get anything to roll quick and good. They need more time, maybe one year more before HAMP working right for the people.
Bad news! What should these people do? They don’t have time. Government has to do something, something that will have a quick result.
Sometimes it feels terrible to know that government or whoever is ruling the country is not doing what they have promised to do for the people.
I think one should go for a loan when he is in a tight corner and he does not have any other source of money because that is the only source of money where you can be guaranteed you will get it, that is if you have a solid reason that you need it badly and the project will contribute in paying the loan back.
If this is true that this scheme is not helping the ammount of people it was designed to do then you have to wonder. I mean is it just another case of something with good intentions not working properly because of red tape and beurocracy? Either way its a shame because it clearly isn’t working for so many people.
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Unfortunately, so many bad deals were made that there is just no way to keep all these people in their homes unless you just forgive them of all current and future payments – which obviously would have huge repercussions across the board to lenders/banks/the market.