Obama Loan Modification Programs Ending? | HAMP Program Canceled

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Education & Training with Tim & Julie Harris® Real Estate Coaching

 

Has the Obama Administrations foreclosure prevention programs worked as originally intended?

Well, no.

Update: At the end of today we will know if the HAMP Program will remain in effect or be completely canceled.

Should we start dancing on the graves of all the failed ‘save housing’ acronyms…HAMP, H4H, HAFA…?

….Its VERY easy to be an arm chair quarter back and criticize the many  (failed and failing) government programs. But, lets jump back in time a couple years.

Remember when the world (economy, anyway) felt like it was coming apart…remember when it seemed like we would all be living in caves? Agents, that was just a 2 short years ago. Don’t think that the threat of hard times has passed. If things start looking 2008-ish again..how long will it take for our industry to start demanding new ‘housing initiatives’ from the government?

When President Obama originally announced the ‘foreclosure prevention’ programs back in 2008 our industry took a collective sigh of relief.

Remember how you felt when you read (on this site) that there may be help coming to aid housing (and in turn, our industry)?

Its safe to assume that the mere creation of these programs 2 years ago acted as a stimulus for housing. Many people (agents, underwater owners etc) regained a sense of optimism due to the lofty goals and proclamations declared….

When HAMP launched in March 2009, the administration estimated it could help 3 million to 4 million borrowers….so far…only 700,000 owners are in a trial or permanent.

Fast forward to today. The shock and awe of the housing crash is over. Now, everyone more or less agrees that we are in a tough real estate market and it will be that way for a long time. The drama of the ‘housing crash’ has been replaced with acceptance.

Bottom line, before you jump on the trendy wagon of criticizing the Obama Administration attempts at ‘saving housing’ give credit where credit is due.

NOTE: I am not being political. Julie and I are dyed in the wool…Republi-Crats. With a healthy dose of Libertarian mixed in.

HAMP FACTS

* Less than 20% of the estimated delinquent mortgages eligible for modification under the Obama administration’s Making Home Affordable Program have moved to the active permanent modification status.

* The government estimates nearly 2.9 million loans and almost 1.4 million borrowers are eligible for HAMP, yet more trial modifications and permanent modifications have been canceled than converted.

* Some 740,000 trials were canceled and more than 68,000 permanent modifications were nixed through the end of January.

* There are another 145,000 active trials and about 539,500 active permanent modifications. When HAMP launched in March 2009, the administration estimated it could help 3 million to 4 million borrowers.

* The big four mortgage lenders have converted the most permanent modifications under HAMP. Bank of America has extended more than 481,000 trial offers and started nearly 359,000 trials and about 106,600 permanent modifications. The banking giant holds nearly 45,200 active trials and nearly 93,300 active permanent modifications. Servicers end up canceling many of the attempted modifications because borrowers submit insufficient documentation, default on payments due during the trial period or are ineligible due to their first-lien expense is below 31% of household income.

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