HAMP Extension 2015: Good News for Struggling Homeowners

By James Young on June 7, 2013
HAMP Extension 2015: Good News for Struggling Homeowners

The Obama administration has announced a HAMP extension for 2 additional years, through 2015. It will be extending its hallmark Making Home Affordable (MHA) initiative until the end of 2015, hoping the extension will allow more homeowners to take advantage of loan modifications which can help them avoid foreclosure.

Immediately following the statement by the administration, the Federal Housing Finance Authority (FHFA) directed mortgage underwriters Fannie Mae and Freddie Mac to continue aiding homeowners through the government’s popular Home Affordable Modification Program (HAMP) throughout the extension period.

The extension is great news for homeowners who are struggling to ward off foreclosure and remain in their homes.

What is HAMP?

HAMP was unveiled in 2009 at the height of the economic crisis and was designed to offer relief for homeowners who had fallen behind in mortgage payments and were facing foreclosure. The program is funded through the U.S. Treasury’s bailout fund and has been modified since its inception to provide relief to a wider audience of homeowners. HAMP provides incentives for lenders and loan servicing companies who agree to rewrite loan terms to help borrowers avoid foreclosure.

According to data from the U.S. Treasury, homeowners participating in the program have realized median monthly savings of $546. The MHA also offers a similar refinance program for homeowners whose homes are not guaranteed by Fannie Mae or Freddie Mac. Although the administration predicted HAMP would provide aid to as many as 3 million to 4 million homeowners, so far only about 1.1 million homeowners have taken advantage of the program.

A streamlined version of HAMP helps homeowners who are more than 90 days behind in payments to modify loans quickly without the need to meet strict documentation requirements which many homeowners found too cumbersome and demanding.

Why is HAMP being extended?

In a statement regarding the extension, Treasury Secretary Jack Lew said the extension provides critical relief to homeowners still facing significant financial troubles.

“The housing market is gaining steam, but many homeowners are still struggling,” Lew said.

“Extending the program for two years will benefit many additional families while maintaining clear standards and accountability for an important part of the mortgage industry.”

Help for homeowners

Although certainly beneficial to homeowners facing financial troubles, home loan modification can be a complex process driven primarily by the lender. Homeowners seeking to ensure they receive the best modification terms can empower themselves by having an independent analysis performed on their loan and their financial situation.

The REST Report offered by Real Estate Services and Technology is one tool homeowners can use to make sure they understand all their options without relying solely on information provided by their lender. For most homeowners, loan modification is a one-shot deal: Knowing every option can help homeowners get the best terms for their unique financial situation.

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About James Young

My name is James Young- I love red wine, sailing, and playing guitar. I believe that everyday is truly a gift. I'm blessed to live five minutes from the sand in the beautiful city of Long Beach, CA. When I'm not assisting homeowners, you'll find me belting melodies with friends around a campfire, wandering the halls of an art exhibit, or watching ESPN re-runs until the sun comes up. So what am I doing here, you might ask? In a couple of sentences- I'm passionate about empowering first-time and experienced home buyers to make their dreams a reality. Whether it's saving thousands on your home loan, buying your first home, or acquiring your first investment property, I'm always here to help. Don't hesitate to ask questions, and please remember to "share the love"! :) #loveloans #loverealestate #lovelife!
  • SofiesVoice

    What is HAMP? Another useless program that the banks are hiding behind while they do their misdeeds on desperate borrowers only to be told that they do not qualify…no one qualifies….and boom….the banks foreclose because they caused the borrowers to get further and further behind on their payments while waiting for this fiasco to “help”. Why extend this scam???

    • Kevin Blue

      Hey Softies, that is not true. HAMP is a very valuable program and over 1,190,000 permanent modifications have been started already in June 2013 alone. You can view all of the Treasury’s performance statistics here: http://www.treasury.gov/initiatives/financial-stability/reports/Pages/HAMP-Report.aspx It’s unfortunate you feel that way, but HAMP has helped millions of homeowners get successful loan modifications.

      • SofiesVoice

        Keep thinking that way if you wish, but as a counselor with A HUD-Approved Non-Profit Agency I have seen first hand the results of this useless program. Yeah, sometimes modified by $100. a month when the payment is $1500 per month can hardly be called a decent modification. Most people go back to foreclosure because the payment was not made sustainable. Or, the servicers find most borrowers ineligible for modification. Are figures given out by the Feds verifiable? That question was asked at a seminar I attended and the moderator said no, you just have to take their word for it!!

        • Kevin Blue

          It’s not about what I think Softie, the numbers don’t lie. I would agree with you in stating that HAMP is not for everyone. It only makes sense for homeowners that fall within a “sweet spot” of having just the right amount of income. If they have too much income, their payment will go up under HAMP. The target DTI is 31%. I have seen firsthand, hundreds of successful modifications through the HAMP program. Whether the numbers produced by the Feds are 100% accurate or not, it’s still a viable program for homeowners in distress. For homeowners that would like to eliminate un-certainty and find out what they qualify for, I would suggest getting a REST Report: http://restreport.com While it does NOT guarantee a modification, it will enable homeowners to see what their projected payment would be given their current level of income. In the case they do NOT qualify, it will tell them exactly why. If you’re in the business of assisting homeowners, I would also suggest you look into becoming a licensee of the REST Report as well to better assist your clients. Wishing you and all homeowners the best.