HAMP Loan Modifications Extended, Now Available Through 2015
Originally introduced in 2009, HAMP, which is short for the Home Affordable Modification Program, originally expired in 2012. It was then extended through 2013. This most recent extension shows that, contrary to some news reports, the foreclosure crisis is not yet coming to an end.
The goal of HAMP is to reduce homeowners’ monthly mortgage payments to approximately 31% of their gross monthly income. This is accomplished by combination of interest-rate reductions, term extensions, and principal forbearance. In some instances, banks are also providing principal reductions. Since its launch in March 2009, about 1.6 million actions have been taken through the program to provide relief to homeowners and nearly 1.3 million homeowners have been helped directly by the program, although it was originally projected to help up to 9 million homeowners.
Banks and mortgage servicers have been repeatedly cited for violating the HAMP requirements, although compliance has become marginally better recently. HAMP contains no private right of action, but consumers have been successful in filing lawsuits against banks for unfair business practices arising out of the banks’ non-compliance with HAMP guidelines.
The press release is available at http://www.treasury.gov/press-center/press-releases/Pages/jl1959.aspx