Homes Sarasota continue hitting the market, as beleaguered Sarasota homeowners rely on “HAMP” to save their homes from foreclosure.
Is the Home Affordable Modification Program "BEST" for you?
The Home Affordable Modification Program (HAMP) is NOT working the way politicians claimed it would help homeowners and slow down foreclosures.
Keep in mind, this is not me sharing an opinion about HAMP. Rather, Obama himself is scolding mortgage bankers (debt owners) for “…abysmal execution of HAMP.”
From homeowners, I hear complaints claiming “loan servicers” continue losing paperwork, blaming homeowners for not submitting or correctly submitting paperwork. C’mon, Servicers, give us a break. These homeowners WANT help. Ya think they’re not going to submit the required paperwork? Sheesh.
Not for one minute do I believe homeowners are not submitting required paperwork. I work many short sales and know how many times I’ve been forced to re-submit short sale packages consisting of 40-70 pages….when “banks or servicers” lose/misplace the package. .
Worse than facing lost/misplaced paperwork for homeowners facing foreclosure is for homeowners it be rejected for permanent modification!
Click Read More below now for 5 compelling reasons many consumers (might be) better off skipping this “Home Affordable Modification Program.
IS “HAMP” THE CURE FOR FORECLOSURES?
In no particular order, the following 5 “reasons” might convince you and other homeowners possibly facing foreclosure that HAMP is not best for you and your family:
1. The “permanent” modification is not so permanent after all.
It’s not a “permanent” modification. Instead, homeowners are getting an adjustable loan with a five year period of low interest. Granted, for many homeowners, they’ll take the 5 years with much appreciation. Forget permanent, they’re concerned about losing their homes. Five years from now, they’ll worry about the ARM. As I’ve commented before, most homeowners pursuing modification admit they have no plans of keeping the house beyond 5 years. Bluntly, they admit the house is underwater…never will return to value…they don’t plan to keep it. Okay….
2. Money spent on trial modifications could be used elsewhere.
The other day, I heard from another homeowner facing foreclosure concerned about paying paid on time for many months (for trial modification) only to face a denial of permanent modification. Common concern for which I’ve not been able to get an informed response. To me, it seems simple: you follow the program’s guidelines and you get the permanent. For some reason, homeowners are not convinced it’s as easy as I understand it (though I most certainly could be mistaken).
If I’m mistaken, it would have been better for these homeowners to just save the money while waiting for the bank to foreclose. In Florida, it might take 18-36 months for a debt owner to foreclose (especially if the homeowner’s attorney defends all motions).
3. Debt is not reduced.
This is a biggie, not just to me but to all people with whom I talk. I also know this point hits many hot buttons. Troubled homeowners (borrowers) going through the modification program end up with more debt than they started with as the banks roll in late fees and payments into the principal. Further (and here’s my point), the debt principal is not reduced on a home valued LESS than what they owe.
4. Credit is not saved.
Forget saving your credit with foreclosure, short sale or loan modification. All three “solutions” hit credit scores hard. Banks are reporting trial modifications to credit bureaus as partial payments and credit scores take the hit. So there you have it. A loan mod is a band-aid…it buys you time.
5. The program cannot help the unemployed.
Unemployed need NOT apply. HAMP is specifically meant to reduce mortgage payments to 31% of a borrower’s pretax gross monthly income. If you have no income, this program will not help you.
The Obama administration is trying to get banks to make the modification process easier for consumers by sending “SWAT teams” to the servicers. It is yet to be seen how the program will fare this year, but so far it simply accomplished the feat of putting 30,000 homeowners into new adjustable rate mortgages with a five year teaser rate. Many people denied a “permanent” modification wasted their money–yes, I understand “wasted” is a powerful word choice.
Homes Sarasota falling in to foreclosure help few people. The borrowers hurt. The banks (or taxpayers) hurt. The neighborhoods and other property owners hurt. There’s a bunch of hurting going on. Please scroll down now to share your thoughts on HAMP. Do you have personal experience with attempting to modify your mortgage? What happened? How do you feel about your “underwater” property? How much (if any) does it concern you?
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