Program, was designed to help homeowners continue paying their
payments on their home. Instead the opposite is happening and
many homeowners are suffering. According to the special inspector
general for the Troubled Asset Relief Program, 312,000 homeowners
have been defaulting their mortgage payments. The report predicts it
is just going to get worse from here.
The HAMP program was developed under the Obama administration
and lent $75 billion to help lenders reduce the mortgage payment
of homeowners. With this money, lenders would be able to reduce
mortgage payments to 31% of the homeowner’s budget.
The idea behind the program was to help individuals avoid
foreclosure. It is a noble idea, but unfortunately it is not working. What
is happening is that homeowners are defaulting on their reduced
payments. When that happens, the homeowner is then faced with
large mortgage payments, and failure to pay means foreclosure.
The administration had said that HAMP would help more than 4
million people avoid foreclosure. Even when there are so many
defaults, the administration still speaks positively of their program.
The findings of this report, however, find out that the program hasn’t
even helped 1 million Americans.
The suggestion for avoiding more defaults? They suggest setting
up a warning system to help homeowners who are on the verge of
default.
So who is to blame here? On one hand, homeowners should not
have defaulted on their modified loans, especially since they were
given a second chance. On the other hand, there are many problems
with the program, such as delays and “lack of transparency in the
denial process”, according to the article.
Story Credit: http://goo.gl/RGTaj
Image Credit By Images_of_Money
http://www.flickr.com/photos/59937401@N07/5474464467/
