The government hasn’t taken the foreclosure crisis lightly and has even developed several foreclosure aid programs in efforts to help struggling homeowners find mortgage debt relief. Unfortunately, many homeowners continue to struggle and have yet to find the relief they are looking for. Maybe there are too many options, or maybe homeowners simply don’t know enough about each option. Let’s take a look at some of the more popular options available:
Home Affordable Modification Program (HAMP)
This program began in 2009 and aimed to open up loan modification options for homeowners by relaxing some qualification standards. Previously denied due to strict qualifications, this program hoped to allow more people into the program and reduce the number of foreclosures. Originally set to help 3 million homeowners, less than 1 million have been successfully helped to date. Despite program efforts, lenders are stubbornly refusing many negotiations or only approving in-house modifications.
Home Affordable Refinance Program (HARP)
Designed to be an alternative for those that did not qualify for a loan modification under the HAMP, this program offers homeowners the opportunity to refinance their mortgages. To date, less than 1 million, of the originally forecasted 4 million, homeowners have been reached. Part of the reason is that the program contained standards that were too risky for lenders. When lenders don’t benefit, they don’t play ball and became unwilling to approve many refinancing applicants. The other reason is that many people simply did not meet qualification standards, even with the relaxed criteria. The bottom line: some mortgage holders are just too risky to approve.
Home Affordable Foreclosure Alternatives (HAFA)
In 2010 another program was designed to help homeowner pursue such as short sales and deed in lieu of foreclosure transactions, instead of foreclosures. However, few homeowners have benefited, mostly due to the lender’s preference to keep short sales and deed in lieu transactions in-house in order to maximize their potential for profit.