Denver home owners will be interested in a recent Keeping Current Matters article, which discussed the outcomes of the federal government's Troubled Asset Relief Program (TARP). TARP was, in part, funded to help maintain house values in the wake of the nation's economic crisis. The program was intended to help avoid foreclosures, after it was determined that the US economic market would be unable to manage the number of foreclosures that were happening.
Regarding real estate, TARP funds were to be used “…in a manner that protects home values, college funds, retirement accounts, and life savings; preserves home ownership and promotes jobs and economic growth; maximizes overall returns to the taxpayers of the United States.” The aforementioned protection of home values and preservation of home ownership was to be achieved through the Home Affordable Modification Program (HAMP).
In its review of TARP's (and HAMP's) outcomes, the Congressional Oversight Panel (COP) noted that: “…when the President announced the Home Affordable Modification Program in early 2009, he asserted that it would prevent three to four million foreclosures. The program now appears on track to help only 700,000 to 800,000 homeowners.”
In mid-2008, Congress established the HOPE for Homeowners program (under the Housing and Economic Recovery Act of 2008). It allowed the FHA to insure refinanced distressed mortgages, and was expected to help 400,000 home owners. According to the COP report, “...it managed to refinance only a handful of loans. This was likely due to the program‘s poor initial design, lack of flexibility, and its reliance on voluntary principal write-downs, which lenders were very reluctant to make.”
So what's the good news? TARP didn't cost taxpayers as much as it was originally anticipated to cost. The COP report notes that this is because the foreclosure prevention programs, “which could have cost $50 billion, have largely failed to get off the ground. Viewed from this perspective, the TARP will cost less than expected in part because it will accomplish far less than envisioned for American homeowners.”
For people who are having trouble making their mortgage payments, they still have the option of doing a short sale on their house. A short sale means that the lender agrees to take a payoff that is short of the amount owed on the mortgage.
Spring is here and there has never been a better time to find your new Denver home! Call The Bandy Team today; we're ready and willing to help with your transition to a Parker horse property, a Founders Village house, or your dream home in Washington Park.
Marianne Bandy
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