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Mortgage help falls short

By Judy Martel · Bankrate.com
Wednesday, October 19, 2011
Posted: 3 pm ET

Remember back in 2009, when President Barack Obama introduced the Home Affordable Modification Program, or HAMP, by touting its goal of helping 3 million to 4 million borrowers keep their homes? The program has actually provided mortgage relief to fewer than a million to date.

The Wall Street Journal reported that Treasury Department statistics show the government program provided loan modifications to approximately 691,000 homeowners as of August.

The program pays lenders to reduce mortgage payments and avoid foreclosure. About 10,800 homeowners received permanent reductions in their loan balances, with a median write-down of 30.5 percent.

Critics of the program charge that it was rolled out too quickly and haphazardly, swamping the mortgage industry with applications it couldn't fulfill. The Treasury Department acknowledges that there were flaws and pledges to keep reaching out to homeowners who need assistance.

Another of the government's programs to help homeowners, the Home Affordable Refinance Program, HARP, is also sharply down from initial estimates. That program is open to homeowners with loans guaranteed by Fannie Mae and Freddie Mac and is meant to allow those whose homes declined in value to refinance to a lower mortgage rate without putting down additional cash. Though projected to help 4 million to 5 million homeowners, it only enrolled 865,000 through July.

Look for an announcement from the administration in the next couple of months about how they plan to make the programs more successful.

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6 Comments
TexasApts
November 03, 2011 at 12:11 am

Well, now I'm waiting for the government's THIRD program for the banks that gave out predatory loans to help their borrowers. Can't wait to hear about the excuse for why I don't qualify for EHLP. Let's ruin your credit first by stalling you with HAMP and telling you not to make any mortgage payments so you'll qualify and then oooops, you don't qualify but ooops, you also don't qualify now for refinancing because you're credit's bad....... BUT wait! Now there's HARP and now that you don't qualify for that, there is hell, I forgot.........and then there's PICK A PAY that Wells Fargo's supposed to be forced into helping assist their borrowers but WAIT, you don't qualify for that either......so, now there's EHLP but WAIT, we're going to extend it for 2 more months. When will you know if you're approved you ask HUD? We don't know........1, 2, may be 3 weeks...... Meanwhile, the bank keeps calling.......When are you going to pay your payments? What made you late? Sorry, we can't read what you told us two days ago on our computer.

Wait, now Wachovia is calling and leaving you a message saying expect something in the mail within the next two days and call us back about possibly assisting you with your mortgage. WAIT, you mean when I call Wachovia no one knows anything about this????

I'm DONE! I can see why some people have ended their lives and while tooooooooo many have just given up and given in.....sad but they HAD to give up, it's an endless feeling of being on hold. Do I paint my living room or do I start moving things into storage. But WAIT??!?!?! I now won't even be able to get an apartment because I am so fricken late on my mortgage payments.......

Here's to you World Savings......Here's to you Wachovia (psssst Banks, hire people that actually KNOW about the mortgage business) and pssssssst here's to you Wells Fargo.

And this my friends....

Roberta
October 21, 2011 at 11:19 am

Our gov. needs to step up with action and less talk. We are close to being under water and can't find any lenders who will help. We need HARP action!!

Wolverine
October 20, 2011 at 9:51 am

What?! We're suddenly surprised that the government has done less to help its people than originally intended or promised?