The Home Affordable Modification Program (HAMP) was a government-backed program born in 2009 to provide relief to borrowers behind on their mortgages. The program provided structure and incentives to mortgage servicers to encourage them to lower monthly payments for borrowers in an effort to keep more of them in their homes. With fewer borrowers in default, and a shift in the political powers in charge in Washington, the program died December 31, 2016 with no plans to resurrect it.
What does the future look like for homeowners in distress?
HAMP is gone, but the need for loan modifications is not. Without the government safety net, how will homeowners in distress be able to get the help they need?
The banks are working together to create an unified modification program to take HAMP's place, but that program will not be available until fall 2017 and will be without government support or incentives. The debt collectors are creating a program that benefits their needs, not those of the borrowers, so who has the homeowner's back now?
What can homeowner's do in the meantime?
Distressed homeowners can still apply for in-house modifications through the servicer, but historically only 15% of the those applications are ever approved. And without governmental oversight - and more importantly government financial incentives - who knows if banks will be willing to modify loans or if they'll resort back to foreclosing on homeowners and taking their chances in the REO (Real Estate Owned/Post-foreclosure) market.
Who has the homeowner's back?
So now homeowners are on their own when it comes to applying and seeking mortgage relief - good luck! With an 85% chance of failure, all but the most astute borrowers should probably look for help with this complicated process. They can still seek counseling through the MHA program, hire a mortgage modification service (watch out for scams!), or they can hire an experienced law firm to defend their rights and help obtain relief.
If you have questions about this topic or need assistance obtaining mortgage relief, you can reach The Lane Law Firm at 713.595.8200 or schedule a free consultation by clicking the button below.