My good friend, Julie Kay, recently wrote a South Florida Business Journal story on the mixed reviews for the government’s Home Affordable Modification Program, or HAMP, as legislators like to call it.
According to the article, HAMP is part of the U.S. Treasury’s Home Affordability & Stability Plan to save 3 million to 4 million homes from foreclosure. So far, approximately 360,165 trial modifications have started nationwide.
I was asked to provide my take on the program and will be quoted in the article. Here is a summary of my opinion as expressed to Julie:
One flaw with the program is that while a small percentage of individuals has seen their interest rate drop or the terms of their loan extended, the program does not provide for principal reduction.
A second flaw I identified is that the program does not extend to jumbo mortgages, second homes or investment properties– a group which makes up more than half of all homes.
So be sure to check out South Florida Business Journal entire story or if you are a subscriber, you can check it out at http://southflorida.bizjournals.com/southflorida/stories/2009/09/28/focus5.html
Here’s the entire story by SFBJ Julie Kay:
Three months behind on his mortgage, Hollywood resident Neil Reisner applied for a mortgage modification under the federal government’s $50 billion loan modification initiative.
But, he has been less than thrilled with the outcome. JP Morgan Chase, his loan servicer, offered him $300 off his $2,700 monthly mortgage. What he saves now will be tacked onto the back end of his mortgage.
Reisner, a journalism professor at Florida International University and father of two, says he will probably be forced into foreclosure.
(more…)
