The federally funded Home Affordable Modification Program started in February of 2009 and is scheduled to run through December 2012. The goal of the program from its inception was and still is to prevent foreclosures and lend a hand to financially distressed homeowners who are unable to keep up with current monthly mortgage payments due to loss of income, disability or other financial issues.
Is the Home Affordable Modification Program (HAMP) coming to an end?
Homeowners have expressed concern over longer than expected delays in both paperwork and approval and disappointment in the outcome of their applications as a result of these issues. According to the most recent report issued by the Department of Housing and Urban Development each month that provides details of the program for the preceding month, there are 4 loan servicers/program participants that “need substantial improvement”:
- Bank of America, NA;
- J.P. Morgan Chase Bank, N.A.;
- Ocwen Loan Servicing, LLC; and
- Wells Fargo Bank, N.A.
As of this month, the Treasury Department started withholding financial incentives for three servicers: Bank of America, NA; J.P Morgan Chase Bank, NA; and Wells Fargo Bank, N.A. The Treasury will not withhold financial incentives owed to Ocwen Loan Servicing, LLC for this quarter as their compliance results were negatively effected by a large portfolio acquisition during this time. Servicers under the Home Affordable Loan Modification are required to address all issuers of non-compliance.
In the month of April, the report indicates that 29,000 homeowners received a trial HAMP modification, and 29,000 additional homeowners received a permanent modification with a average payment reduction of 37 percent—or more than $500 every month. It appears that the program works for some but not all but the program has assisted over 4.8 million modification arrangements were started between April 2009 and the end of March 2011.
The projected end of the Home Affordable Modification Program, though slated for December 2012, is a long way off. The economy is still far from stable and between now and that date much could change that could delay the end of the program. The coming months will be crucial in determining the overall scorecard for the Home Affordable Modification Program.
