More good news has come from Obama’s foreclosure crisis efforts as existing mortgage modification programs are being continually expanded and revamped. Earlier reports mentioned the expansion of eligibility requirements of the Home Affordable Modification Program in efforts to reach more homeowners in need, but the changes don’t stop there.
Bigger and Better
Not only is the target population of struggling and underwater homeowners being broadened by changes to the HAMP, but modifications may soon be open several other demographics. Under previous efforts, loan modifications were only open to primary residence mortgage holders and did not include rental or investment property owners. The new expansion would extend the eligibility to otherwise qualified homeowners regardless of whether the property is a rental or second property. This expansion comes in light of a wave of properties in which foreclosures significantly impacted low-to-moderate income renters. It is estimated that the program’s expansion could reach as many as 700,000 rental properties that are currently at risk of foreclosure.
Homeowners experiencing trouble due to economic or unforeseen life situations may also soon be reached by the HAMP expansion. Mortgage holders suffering large medical, credit card or second lien debts may be eligible to receive modification help. Many of these homeowners were previously disqualified if their debt-to-income ratios were below 31 percent. The program’s expansion will open up case evaluations for homeowners that fit this criteria to determine if any efforts can be made to include them based on other qualify factors.