Is the HAMP Program Helping Americans get Loan Modifications?
Under President Obama’s new Home Affordable Mortgage Program (HAMP) guidelines, Americans struggling to make their mortgage payments are given a second chance to save their homes during these tough economic conditions. Unfortunately, there have been many reports of participating lenders neglecting to keep up their end of the promise they made to modify the loans of these struggling families.
Tracy Davis and her husband were victims of such a case. After meeting with a Bank of America representative on October 30th, 2009, the Davis’ were told that they qualify for a loan modification under HAMP guidelines. With the exception of a few calls from a collections center in India, they had not heard anything regarding their loan modification for the next four months.
The Home Affordable Mortgage Program was created in order to keep 3 to 4 million Americans in their homes.
“Federal Statistics show banks are making plenty of offers, but relatively few of those loan changes are being made permanent.” (Berger 1)
In fact, out of roughly 1 million homeowners originally approved for HAMP, only 116,000 have had the new mortgage terms become permanent. The most common occurrence is a trial period of payments that the lender outs the homeowner on. The trial period of modified payments should only last for three months; however lenders are either requiring homeowners to continue making more trial payments after the scheduled 3 months, or are failing to communicate with the homeowners on a permanent modification all together after the trial period is completed.
Tracy Davis and her husband both had steady employment as of late 2006, but an unfortunate turn of events left them both laid off and looking for work. Both took sporadic jobs here and there, and both eventually ended up working at a grocery store for about one third of their original pay. With mortgage payments at $1000 per month, they continue to struggle to make their payments on time. The Davis’ are just one example of the millions of families that are in similar situations. These people need help, and here at KEL, we are dedicated to helping each client who comes to us in their time of need.