St Louis Refinancing Group Reports Foreclosures Going Head-to-Head With HAMP | Mortgage

St Louis Refinancing Group Reports Foreclosures Going Head-to-Head With HAMP

by FloydJ.Tapia

There seems to be more and more discouraging news stemming from the overall failure of HAMP, the federal foreclosure prevention program, not just from mortgage and real estate professionals but from key Washington officials.

With letters being traded between Neil Barofsky, special inspector general for the Troubled Assets Relief Program (TARP), and one key senator, he has recently said in a report that the U.S. Treasury now expects only 1.5 million to 2 million homeowners to get mortgage relief.

Compare this to the 4 million it initially claimed, even if this new number of permanent loan modifications could be accomplished at this point seems to be only a miracle.

Looking at the whole picture, less than 200,000 which equals five percent of the 4 million have gone from the trial program into a permanent loan modification.

But if matters couldn't be worse, the inspector general's report warned that many borrowers are at risk of re-defaulting on their St Louis mortgages even after receiving help under the federal program.

Many feel that if these homeowners were responsible, they wouldn't be in this same position they once were. But in their defense, most of these consumers still owe more on their home than what it is worth. Another words, the HAMP program failed to fix this problem.

Without digressing to a great degree, I think its fair to mention the abominable acts of not just the big insurance and banking leviathans but the average person who bought a home they knew they just couldn't afford and did it by taking the only type of loan that could give them this undeserved asset. Then you have the pure fraudulent acts of those who knowingly lied on their stated income application. Years later, these acts have come to be known as "liar loans."

But Barofsky doesn't stop there. He continues to show his skepticism about the government continuing to offer these loan modifications. Well, the U.S. Treasury had a few things to say about his comments.

In interesting comment by Herbert M. Allison, assistant Treasury secretary for financial stability, he said that the HAMP program "should be measured by how many eligible homeowners are able to avoid the pain and stigma of foreclosure by reducing their mortgage payments to affordable levels while either remaining in their homes or transitioning with dignity to more suitable housing. The number of permanent modifications is one element, but not the only element of gauging the success."

It is rather interesting how politicians and their ever-so-loyal henchmen try to inadvertently, yet aggressively make excuses at why everyone is looking at things the wrong way except for them.

What Allison, in reality, was saying is that the problem is not in the failing of HAMP, but rather that Barofsky and other critics are not measuring its lack of success the correct way. Oh, really.

Since Allison clearly points out that permanent modifications are really only one way to help struggling homeowners, this somehow suggests that he himself doesn't firmly believe his previous comment.

The fact that servicers offering other foreclosure prevention initiatives and alternatives such as short sales must be taken into consideration.

However, most consumers have heard from its beginnings that this federal loan modification program (HAMP) was to be the very best way to help this country on the road to recovery by stopping the onslaught of foreclosures.

And as many homeowners have found out, if their modification does not include a worthwhile principal reduction, it will in time fail the consumer.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

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