HAMP Synonymous with Hell and More Pain...

The federal (HAMP) "Home Affordable Modification Program a/k/a "Making Homes Affordable" was designed to help millions of people bring their mortgages in line with the value of their homes.  The hope was that the program would help struggling homeowners save their homes and avoid foreclosure.  It was a nice idea.  Too bad it didn't work.

HAMP has ended up serving as a means for banks to suck billions of dollars out of homeowners. According to Treasury reports, 160,000 homeowners have been helped in one form or another, but in many cases a $20 reduction in monthly payments counts as a successful modification.  Does that sound like the difference between making a payment and not?  I don't think so.  Plus, often times the principal has been increased by adding arbitrary fees and charges to the original amount of the loan on properties whose values have drastically decreased.  That's the direct opposite of what the program is intended to address!

Now comes news of two more plans aimed at helping distressed homeowners. On March 26th the Obama administration announced plans to create not one but TWO new programs, one addressing unemployed homeowners and the second to help those whose homes are underwater.  That's good news if you fit either of those categories. But there are a couple of issues that stand out with each of these latest plans.

 As noted by Richard Zombeck, Huffington Post's mortgage specialist and founder of the new site ShameTheBanks.org, in order to qualify for these new plans,
"Homeowners must not have missed any payments on their home loans, must live in their home as a primary residence and must provide proof of income. This is contrary to advice given to homeowners over the past year and a half, who were told by banks, servicers, and government agencies, that they wouldn't even be considered for HAMP if they were current on their payments. This factor alone excludes millions of potential candidates from this new program. Anyone having had the misfortune of dealing with the previous plan will immediately see the flaws."

So how can any consumer make an informed decision when all these programs contradict one another? Without a clear map that spells out the pros and cons of each, consumers can't make an informed decision as to what can and will help them and what choice can lead them down the wrong path.

See more: Making Homes Affordable Falling Flat.

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