Loan modification help has been difficult to come by for many homeowners in recent years. In efforts to combat stubborn lending practices and help homeowners avoid foreclosure, the government launched the Home Affordable Modification Program (HAMP) in 2009. Since its launch the program has helped thousands of distressed families, but is facing criticism over failing to reach target numbers.
Slow But Steady
The purpose of the HAMP is to provide homeowners with loan modifications in order to lower their payments and avoid mortgage default. So far, the program has reached close to 800,000 borrowers across the nation, a far cry from the projected 3 million targeted for help. Critics also latch onto fact that only 43 percent of those who have been helped under the program continue and are successful, leaving much to be considered about the program’s effectiveness.
The government admits that HAMP has room for improvement and has been working to revise the way it works to better serve homeowners in need. In June, the HAMP will be expanded to include borrowers whose debt-to-income ratio is below 31 percent and rental properties. The new HAMP will also provide larger payment reductions in modifications, including principal mortgage write downs. It is hoped that the revisions will bring about the level of help originally planned by program advocates.