According to the U.S. Treasury’s July report on the federal government’s “premier housing program,” HAMP (Home Affordable Modification Program), nearly half of all participants have dropped out of the program since its inception[1]. This means that about 625,300 homeowners who received modifications on their loans failed to make their new, lowered payments and have lost their homes to foreclosure or foreclosure options.
As a result, the Treasury suggests that “the $75 billion government effort is failing to slow the tide of foreclosures in the United States,” according to economists[2]. Furthermore, fewer people are even entering the program and even fewer are ending up with permanent modifications, indicating to some analysts that “the government program as currently structured is petering out,” as Moody’s Analytics’ chief economist put it.
July’s number of dropouts is up about 40% over June’s, and only about 32% of all the people who have entered the program are in permanent modifications and making their payments on time. On one hand, that still is nearly a third of participants whose homes have been “saved.” However, for $75 billion, one would hope that a program of this magnitude would garner better results. Do you think that these numbers constitute success or failure?
Thank you for reading the Bryan Ellis Real Estate Letter! Your comments and questions are welcomed below.
[1] http://wallstreetpit.com/41451-hamp-dropout-rate-nearly-50-treasury
[2] http://www.breitbart.com/article.php?id=D9HNEND00&show_article=1
The continual OBAMANATION of our federal $$$ by this administration is a constant disgrace and embarrassment. We can only hope and pray the liberals who voted this inexperienced orator to power have now awaken and see the error of their ways. They need only to look into the mirror to blamed themselves when their childrens’ financial future has been runied and saddled with national debt only third world countries have seen. Shame on you OBAMA
Where do you get these numbers?
Please use objective, not sensational numbers to try and slam your political opponents
“Obama that’s wasting billions ”
The source citations are at the bottom of the article. Check them out for yourself. — Bryan Ellis
For 75 billion we all would have been better off to just have given that money to the people.
Like all of Obama’s money stealing programs, it is a total failure!
FHA Secure, Hope for Home Ownership, Home Affordable Modification Program and other existing programs are not working.
Time is of the essence for a bold new approach to foreclosure mitigation. What is needed is a plan that can be implemented quickly and broadly, lowering the monthly mortgage payment so that homeowners can afford the payments and stay in their house. The plan we are proposing is simple.
• Years 1-5 rate of 2-3% with interest only option for owner occupied properties.
Year 6 rate of 3%, Year 7rate of 4% rate and Years 8-30 rate of 5%
There should be an option for a 40 year amortization program.
• Non-owner occupied can participate at a 1% higher interest rate.
An appraisal will establish the property’s present value. That will establish the new “Interest Bearing Principal Balance”. The difference between the loan balance which include loan amount plus arrearages at the time of loan modification is divided equally and 50% are principle forgiveness and the other 50% become noninterest bearing “Deferred Principal Balance” due on sale of the property or in 30 years at loan maturity.
Let us say we have a 500,000.00 dollar loan with 20,000.00 in arrears and appraised value of 300,000.00. In this scenario 110,000.00 of the loan is forgiven. The bank has 110,000.00 Deferred Principle Balance and 300,000.00 Interest Bearing Principle Balance. It is a win-win situation for everybody.
Dear -john frangoulis
Screw all the programs, people need jobs to pay for anything.
Forgiving is for the Lord, all others pay cash. Its called capitalism,
supply and demand. Has anyone examined what is going on with:
Gov;t.(Union) Motors, Board of Directors meet and propose:
wages to cut in half. Went over well with union members. Its
like them telling us they made a profit. Right, Would you like to
buy my beach front property in Montana? Its BS pure and simple.
Why in the hell should the bank take a loss? What did they do
to deserve that? Tell that to bank shareholders, you’d be lucky to
live.
Hi there!
I like your permanent looking out for us.
thank you so much