Key inside officials on Capitol Hill seem to be joining the criticism involving the federal foreclosure prevention program known as HAMP due to its numerous failures including their cynical outlook on where its heading.
With letters being traded between Neil Barofsky, special inspector general for the Troubled Assets Relief Program (TARP), and one key senator, he has recently said in a report that the U.S. Treasury now expects only 1.5 million to 2 million homeowners to get mortgage relief.
Compare this to the 4 million it initially claimed, even if this new number of permanent loan modifications could be accomplished at this point seems to be only a miracle.
The actual statistics may be surprising but only 200,000 homeowners have been able to go from their trial modification to a permanent loan status.
But if matters couldn’t be worse, the inspector general’s report warned that many borrowers are at risk of re-defaulting on their St Louis mortgages even after receiving help under the federal program.
Again the critics are coming out of the wood works suggesting that these homeowners are irresponsible. But the truth of the matter is, many still owe more money than what their home is worth not mentioning that others have second mortgages.
Without digressing to a great degree, I think its fair to mention the abominable acts of not just the big insurance and banking leviathans but the average person who bought a home they knew they just couldn’t afford and did it by taking the only type of loan that could give them this undeserved asset. Then you have the pure fraudulent acts of those who knowingly lied on their stated income application. Years later, these acts have come to be known as “liar loans.”
Getting back to the matter at hand, Barofsky then shows his further skepticism basically saying that these loan modifications may not be the best program to continue offering. The Treasury department had other opinions as to the wide spread criticism.
Herbert M. Allison, assistant Treasury secretary for financial stability, released in a report that the HAMP program “should be measured by how many eligible homeowners are able to avoid the pain and stigma of foreclosure by reducing their mortgage payments to affordable levels while either remaining in their homes or transitioning with dignity to more suitable housing. The number of permanent modifications is one element, but not the only element of gauging the success.”
The approach here seems to be to make an excuse or perhaps help us to see how this program should actually be viewed and decided as regards its ultimate success or failure.
What Allison, in reality, was saying is that the problem is not in the failing of HAMP, but rather that Barofsky and other critics are not measuring its lack of success the correct way. Oh, really.
Since Allison clearly points out that permanent modifications are really only one way to help struggling homeowners, this somehow suggests that he himself doesn’t firmly believe his previous comment.
We cannot ignore the fact that these servicers are also offering other foreclosure prevention initiatives such as short sales as realistic alternatives.
However, most consumers have heard from its beginnings that this federal loan modification program (HAMP) was to be the very best way to help this country on the road to recovery by stopping the onslaught of foreclosures.
And as we are finding out, many of these modifications did not include a realistic principal reduction, which means in all likelihood, it will fail.
Look at some of the best St Louis home loan options on a St Louis mortgage or a St Louis refinancing loan, by visiting our websites or by calling Steve, Doug or Floyd at 877-334-0210 or 314-334-0210.
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