Rising Unemployment and Obama’s Anti-Foreclosure Program

Foreclosure filings occur about every 13 seconds and continue to impact property values and slowdown the nation’s recovery from recession. 

According to a recent report from the Obama administration on the Home Affordable Modification Program (HAMP) and the Home Affordable Refinance Program (HARP),  rising unemployment, falling home prices and mortgage resets continue to threaten millions of homeowners with foreclosure. 

The Treasury Department hopes to prevent as many as 4 million foreclosures through HAMP, however, ”there is reason to doubt whether the program will be able to achieve this goal” stated a recent report.

It went on to say that “HAMP was not designed to address foreclosures caused by unemployment, which now appears to be a central cause of nonpayment.”

Approximately 1 million homeowners facing financial hardship have been given mortgage payment reductions in 3 month trials under the HAMP program.  However, as few as 116,000 have been able to obtain permanent loan modifications under the HAMP program from participating lenders.  

These loan modification numbers are in sharp contrast to those predicted by the Treasury Department and President Obama just a year ago. It was originally estimated that these programs would help 3 to 4 million homeowners avoid foreclosure over the next few years.  Michael Barr, Assistant Treasury Secretary, stated that “we were attempting to set realistic expectations, but I think we failed to do so.”

Approximately 60,000 borrowers who entered into the Home Affordable Modification Program were unsuccessful at avoiding foreclosure, mainly due to the following reasons:

• Borrowers are unable to meet the loan modification terms during their 3 month trial period. 
• Monthly payments can be reduced to as much as 31% of monthly income under HAMP, but when borrowers are faced with  job loss that drastically reduces or eliminates household income, the program is not set up to deal with it. 
• The program reduces monthly mortgage payments but doesn’t address the principal balance owed by borrower. The program is not equipped to deal with homeowners who are struggling with monthly payments and who have loan balances that exceed home values.

In order to avoid rising foreclosures, the Treasury Department must reconsider whether new programs or program enhancements can be adopted that would not only address job loss but the principal owed on loan balances.

Charlotte NC Avoid Foreclosure and Short Sale Expert

Leigh Brown is a Certified Distressed Property Expert® (CDPE) and the leading short sale – avoid foreclosure expert in the Charlotte metro area. 

If you or someone you care about is facing possible foreclosure on their home or investment property, you owe it to yourself to enlist the expertise of Certified Distressed Property Expert® Leigh Brown.

When Bank of America bought out Countrywide Financial, it became one of the leading mortgage servicers in the nation. Leigh happens to have access to B of A’s propriety system, which allows her to expedite the short sale process.

With Leigh Brown on your team, you have the most qualified avoid foreclosure and short sale help available!  Leigh can be reached by filling out her online contact form , or give her a call at (704) 688-5005 or toll free at (866) 440-7136.

You’ll be glad you did because Leigh Brown can help!

Sources:
Realty Times  
Marketplace  
Yahoo Real Estate