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Government Mortgage Assistance Programs promised to help millions of American homeowners lower their monthly mortgage payments and save their homes from foreclosure. What have been the results for 2010? Have government mortgage assistance programs met the expectations?
The July to September 2010 quarter show that around 470,000 homeowners received some kind of mortgage assistance. That represents a 17% drop from the second quarter of 2010, and a 32% drop from the same quarter of 2009. Bruce Krueger, a mortgage analyst with the Office of the Comptroller of the Currency, explains this is a natural pullback after banks have sifted through the pool of eligible borrowers who were eligible for mortgage assistance.
The main government mortgage assistance program is HAMP, the Home Affordable Modification Program. How does it compare with mortgage modifications carried outside the program?
The Office of the Comptroller of the Currency report shows that in the third quarter of 2010 59,000 HAMP modifications were completed while 175,000 were completed outside the HAMP program. Why is HAMP lagging behind the bank’s own proprietary loan modification programs? Two main reasons: one the requirements to qualify for the bank’s loan modifications are less stringent, and two, HAMP usually requires banks to lower monthly payments by a greater amount than private modification programs. Approving a HAMP loan modification is, when all is said and done, the job of the lender and banks don’t have to advertise the differences between the terms of HAMP and private modification programs.
In a Nutshell
The truth is the Home Affordable Modification Program has not met the expectations set by the government. The administration set the goal of helping 3 to 4 million homeowners (about half the American homeowners facing foreclosure), but the program is only likely to help 700,000 to 800,000. That is barely 25 percent of the homeowners it set out to assist. It is hard to portray that as a victory. Nevertheless, for the 700,000 to 800,000 who do see their monthly payments lowered and save their homes from foreclosure this has certainly been a useful exercise.
If you are facing foreclosure, struggle to afford your monthly mortgage payments or have just lost your job, there are government mortgage assistance programs you can apply for. The key is acting early. The third quarter of 2010 has seen a sharp rise of foreclosures, a total of 187,000 in the July to August period. That is a 32 percent from the second quarter and 3.7 percent from the same period last year.
Although there are no guarantees, there are steps you can take to avoid becoming a statistic. Explore our website and see what mortgage assistance programs you can qualify for.
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