Foreclosure Still Not Helped by HAMP

The HAMP program is still not effectively helping homeowners avoid foreclosure.

These statistics are for the 170,000 HAMP modifications already completed.

There have been more than 450,000 foreclosure proceedings started in just the last two months.

For over 75%, the home is still worth less than what is owed on the first mortgage, so foreclosure may be put off, but only short term.

Over half are “seriously” underwater, meaning they owe at least 25% more than the value of their home.

And the average is 35% underwater, for those who have received modification.

That is, even AFTER the HAMP modification, they owe $1.35 for each $1.00 the house is worth.

Which helps who? The mortgage companies, who do not want to foreclose anyway.

More people are deciding it makes more sense to walk away from a home that is so far underwater, let foreclosure happen, rather than get a HAMP modification.

And, these figures only count the FIRST mortgage. So, even worse when you count second and third mortgages.

As quoted by Shahien Nasiripour in the Huffington Post:

“Negative equity is the single most important driver of defaults,” Laurie S. Goodman, senior managing director at Amherst Securities and a top mortgage bond analyst, said in February during a panel discussion at the American Securitization Forum’s annual conference.

This is the same song I have been singing on HAMP for a while, 25% of the temporary modifications have been converted to “permanent.”

I use quotes, as a lot of these change the terms for five years, at which time you may owe more then when you started.

40% of the homeowners who get modifications, default again.

I understand that, most of my clients are so desperate to keep their home, they over-estimate income and/or under-estimate expenses.

The mortgage companies do not want to take their losses on the plunge in home prices.

How can you blame them?

They keep getting the political class to bail them out with our tax dollars.

Even though almost all HAMP modifications benefit them more than the homeowner, the taxpayer is paying them for each modification.

They got us coming and going.

Judicial mortgage modification is a much better approach to the foreclosure crisis.

Foreclosures Still Not Helped by HAMP

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