In recent weeks, the Obama administration released data on Making Home Affordable Program. According to the 10 page report, HAMP’s participants climbed – on constant basis – to reach over 1.1 million trial modifications with 23% granted permanent modification. East Cost Homeowners top the South California in total percentage of HAMP activity. Overall, 12.2% of all HAMP activity had taken place in California. In total, almost 48 thousand distressed California homeowners were given permanent modification with 160 thousand in active trials.
Bank of America tops the list of investors who offered HAMP modification with a total of 283,558. Wells Fargo Bank is second followed by JP Morgan Chase and CitiMortgage. In total percentage, GMAC tops the list of all servicers by offering modification plans to 48% of their total 60+ days delinquent borrowers. Ironically, Bank of America – the bank saved twice by tax payers – ranks 15 by offering modification plans to only 26% of their total 60+ days delinquent borrowers.
As expected, loss of income accounts for 59.1% of hardship reasons leading to delinquency. Excessive obligation – such as increased payment or uncontrolled cost of living – came in second with 10.5%. The report claimed a median savings of $512.39 per modification leading to a $3 billion in total savings. All borrowers were given interest rate reduction under HAMP with 38.9% offered term extension and 27.6% given principle forbearance. As of March 2010, the program had reached close to 40% of its estimated goal.
After the release of the report, media outlets attacked the program. In a recent article, Renae Merle – from The Washington Post – noted that HAMP failed to attract new enrollees as current participants failed to make the crucial move from trial to permanent modification status. This is very true for unknown to most distressed homeowners, HAMP guidelines include several gaps allowing servicers to prolong or halt the whole modification process. It is imperative for any distressed homeowner to seek professional legal counseling while renegotiating existing mortgage terms and guidelines.
Evident from Making Home Affordable Program report, HAMP is working on a limited scale. This reflects common problems with any government program trying to act in the capacity of an umbrella over a host of competing entities. Distressed homeowners need to hire a professional legal firm to represent them in the loan modification process. In addition to legal advice, lawyers understand the inter-dynamics within borrower-lender-servicer relation and how government issued regulations alter the positioning of each party. Needy homeowners must stop wasting time and consult with an experienced consumer rights – debt relief – attorneys as soon as possible. In a short time, fees associated with legal counseling will pay for themselves by giving distressed homeowners a better fighting chance.
Contributor, designer & admin for JohnHart Gazette.
