Home Affordable Modification Program (HAMP) Update
Freddie Mac has been reduced to going door to door to attempt stopping foreclosures. Well...wonder how they are being received by their beleaguered mortgagees? Anybody seen Freddie on your street yet?
$4.7 Billion headed to the usual suspects: To date, our modification partner's experience with the primary originating banks of so many distressed homeowners has been pretty hard going. Oddly, the HAMP program has not been all that popular with some of the biggest banks with the highest foreclosure rate. Namely Countrywide, GMAC, Citi, National City Bank. So to encourage these big banks to actually USE the government foreclosure assistance or modification/refi programs our Federal Govement is giving them an additional $4.7 Billion to get them on board. Which means if you have had a lame response to your request for loan modification at first request, then try try again.
One point: Many servicers of FHA and VA loans are also servicers of Fannie and Freddie Loans. They approach their responsibility of modification according to how much the servicer, i.e., investor is willing to work with a given borrower. USDA and VA have higher percentage of guarantees than FHA which is insured against default-- but when the lender, i.e., the servicer is left holding the bag once the government funds run out they are not in a very helpful mood.
Originally, HAMP, part of the U.S. Treasury's Home Affordability & Stability Plan is also working in tandem with the Neighborhood Stabilization Act. These programs are designed to help at-risk homeowners by providing fair and consistent modifications. Neighborhoods with a high level of foreclosures are being given extra consideration to help prevent the loss of values such a rash of high foreclosures sets in motion. The fact is: many wily investors are swooping in and BUYING distressed homes at short sale prices and moving folks on quicker than these programs are arriving to help. There goes the 'hood?
Here are a few relevant information links:
Read the Waterfall criteria set by the U.S. Treasury for Fannie Mae, Freddie Mac and non-GSE servicers.
For more information on the U.S. Treasury's program or GSEs' requirements, please visit: