Congress Threatens To Withhold Critical HAMP Protection from Homeowners
Some lawmakers want to eliminate the Home Affordable Modification Program and the protections it provides for homeowners in danger of foreclosure.
May 22, 2011
Since it began in 2009, the Home Affordable Modification Program has given over half a million Americans a realistic chance to hold on to their homes. Now, new legislation in the House of Representatives could put an end to the program and leave thousands of families out in the cold.Home Affordable Modification Program
HAMP was created to give relief to Americans in danger of losing their homes through foreclosure by providing an avenue for mortgage modification. Currently, around 30,000 homeowners take advantage of HAMP loan modification every month.
HAMP has strict eligibility standards. But for those who qualify, a number of steps can be taken to lower homeowners' monthly mortgage payments to no more than 31 percent of their income; a mortgage's interest rate may be reduced, the loan term may be extended or interest may be deferred on a portion of the principle.
As a taxpayer-funded program, safeguards were built into HAMP to protect public funds. For example, a mortgage holder must show that he or she can make modified payments on time for a trial period before the modification becomes permanent and HAMP funds are expended.
Much-Needed Assistance
There are indications that this program is working. In fact, people receiving other types of mortgage modifications are twice as likely to default at six months when compared to HAMP participants. In addition, more than 80 percent of all HAMP participants have remained in their homes for at least one year after starting the program.
While signs of economic recovery are on the horizon, terminating HAMP now would leave struggling homeowners where they were before HAMP with very real risks of losing their homes. In depressed housing markets hit hard by the foreclosure crisis, eliminating HAMP could cause unnecessary setbacks and prevent homeowners from getting back on their feet.
If you are struggling to make mortgage payments, contact an attorney with experience in stopping home foreclosure. Participating in HAMP is not the only option for keeping your home, and a lawyer can help you determine which option will work best for you.
Article provided by Law Offices of Robert L Firth
Visit us at www.firthlaw.com