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More than 20% of the nation's mortgage borrowers owe more than their homes are worth.

The once wide-open doorway to homeownership closed a teensy bit more this week when a key government agency announced a proposal to no longer allow mortgages for borrowers with very low credit scores.

Predatory lending would likely become a thing of the past if proposed regulatory reform rules are put into practice. And that may mean that mortgages get more expensive and more difficult to get, lenders warn.

Mortgage borrowers hurt by the Gulf oil spill may qualify for temporary relief from paying their mortgages, without fear of losing their homes.

Most borrowers who have had their mortgages modified through a government-sponsored program will redefault within 12 months, according to a report

Banks are seizing more foreclosed homes even as the number of people falling behind on their mortgages is declining.

Pressure is mounting on loan servicers and investors to reduce troubled homeowners' loan balances...but the two largest owners of mortgages aren't getting the message.

Obama’s Loan Modification programs have been criticized for their lack of results. But what are these results? The March Servicer Performance Report is fresh off the press, so let us have a quick look at what it has to say.

The highlights for HAMP are that more than 230,000 mortgages have been permanently modified. 108,000 loans have been approved by the lender and are simply waiting for the borrower to sign the final papers. That gives us a total 338,000 loans with permanent modifications. The other big newsbyte is that over 1.1 million trial loan modifications are active under the HAMP program. As you all know these trial loan modifications last for three months. If at the end of this period the borrower has provided all the relevant documentation and is up-to-date with his mortgage payments he is given a permanent loan modification. That is, of course, the theory.

According to MHA these loan modifications represent over $3 billion dollars in savings for monthly mortgage payments. The bad news on the report is the number of trial modifications added in the March has dropped to 57,000 from 72,000 in February. The reason for this, according to HAMP’s spin, is that servicers and lenders are requiring upfront documentation before trial modifications start. This has been a bone of contention with critics of the program that see the trial loan modification (without prequalifying the necessary documents) as a way of getting troubled borrowers to pay for three extra months and then deny them the loan modification on the basis of pending paperwork .

The flip side on the reduction of new trial modifications is there has been an increase of 15% in the number of permanent loan modifications approved in March. The story MHA is spinning is that numbers are dropping because of prequalifying filters servicers are introducing. The biggest issue with the Making Home Affordable Program is it doesn’t tackle the real issues of the housing crisis. Interest rate reductions of loans can substantially reduce the cost of a mortgage. A drop of 1% translates into savings $1,500 in most cases. The problem is that high interest mortgages are not the biggest problem any longer. Unemployment is.

MHA understands this and is providing alternatives programs to HAMP that provide specific aid to unemployed homeowners. The latest program for unemployed started this month. It provides loan modifications of mortgage payments to 31% of the unemployed worker’s income for a 3 to 6-month period. The question is will these measures provide real aid to those that need it and not just throw good money at lenders and servicers with little long term benefits for borrowers.

Related posts:

1. Loan Modifications Latest Figures, Limbo, Trial Purgatory And Other Horror Stories
2. Loan Modifications Update: The Spin and the Truth
3. Treasury Moves The Goal Posts of HAMP and Lowers Expectations for the Loan Modification Program.

Related posts:

1. Loan Modifications Latest Figures, Limbo, Trial Purgatory And Other Horror Stories
2. Loan Modifications Update: The Spin and the Truth
3. Treasury Moves The Goal Posts of HAMP and Lowers Expectations for the Loan Modification Program.

HAMP, the Obama administration foremost measure against the wave of foreclosures triggered by the financial meltdown is not working as planned. What do you do when something does not work as planned? You clarify how it was never designed to work like that anyway, and patiently explain what it really was meant to do.

When HAMP, the Making Homes Affordable Plan started, the Treasury Department claimed it would help as many as four million troubled homeowners. However the revised projections of the program now are that it will only help 1.5 to 2 million borrowers.

Is this a failure for the government? Of course, it depends how you look at it. Treasury’s spin on it is that the 4 million homeowners the program set out to help did not refer to the number of borrowers that would receive a modification but to those that would be offered one, whether they finally got it or not.

Analysts, even some from within TARP (Troubled Assets Relief Program) are skeptical of if simply offering the possibility of a loan modification is a meaningful or even useful goal. It would be like a shelter home setting the goal of preparing 1,000 meals but not necessarily feeding 1000 hungry people.

The HAMP program was launched by Obama’s administration with the goal of lowering the mortgage payments of troubled homeowners by paying lenders to carry out loan modifications on the mortgages of troubled borrowers.

The bill was going to be footed by tapping 50 billion dollars from TARP and 25 billion dollars from Fannie and Freddie, the government controlled mortgage financing juggernauts. However, so far only 200,000 borrowers have a permanent modification and only 31 million dollars have been used from the billion earmarked for the program.

The Treasury has been quick to point out that permanent loan modifications should not be the only measuring stick of success. There are, Treasure claims, other avenues that are being pursued to help troubled homeowners avoid foreclosure. For instance, Treasury is now looking into the use of short sales, where the owner sells the home for less than the balance of the mortgage, as alternatives to foreclosures.

A fairer measurement of success, again according to Treasury, would be to see how many eligible homeowners are helped to avoid foreclosure and “relocate to a more suitable home” without having to undergo the embarrassment and pain of a foreclosure.

I believe most homeowners do not care so much about the embarrassment of foreclosing as the pain of losing their home and having to move. Whether you swallow the spin coming from the Treasury Department or not, there is no doubt the wave of foreclosures that is hitting our economy has no quick fixes. The expectations the HAMP program started with were obviously too optimistic, and a reality check was well overdo. The real question is not if HAMP is reaching its goals or not, but what measures CAN or SHOULD (not always the same thing) be taken now to help the plight of troubled homeowners.

Related posts:

1. HAMPs Loan Modification Has Finally Got Moving
2. Loan Modifications Double, Treasury And The Obama Administration Optimistic
3. Loan Modification Program, Good Intention Bad Idea

Related posts:

1. HAMPs Loan Modification Has Finally Got Moving
2. Loan Modifications Double, Treasury And The Obama Administration Optimistic
3. Loan Modification Program, Good Intention Bad Idea

The HAMP program has finally started to get some momentum and provide a substantial amount of troubled homeowners with a way out of foreclosure. Unfortunately, this help seems to be too little, too slow, and too late. However, one must accept that steps are being made and that although not all targets have been met, significant progress is finally occurring.

Let’s look at the hard data.

-       After over a year since the program started 168,000 households now have permanently modified mortgage. This represents an increase of over 50,000 from January 2010 and 100,000 from December.

-       There 92,000 trial modifications in the final stages before a permanent modification. According to Treasury the average saving for each homeowner is around $500.

This is good news, and it is certainly a help to those that have been fortunate enough to benefit from it. However, the truth is that it is a drop in the bucket when compared to the 6 million + troubled homeowners that are behind in their payments and are at risk of foreclosing on their mortgages.

When the program started it was hailed as the most aggressive plan the Government was enacting to control the housing crisis. Over a year later only a million people have entered the program, a far cry from the four million households the program set out to help.

A words batter has started over these claims. The Treasury is now claiming the goal was to provide help to 4 million homeowners not make sure they actually got it. If you accept this interpretation, HAMP is between 35 to 45 percent of the way to achieving its goal. Of course, critics claim that the Treasury is simply moving the goalposts.

What is even more worrying is how the borrowers that enter the program are being treated. Valparaiso University School of Law carried out some interesting research on the HAMP program and discovered that although 66% of all borrowers in the trial stage made all their payments, less than 25% have received a permanent modification to their mortgage. The reason for this is lack of paperwork and the loan modification limbo created by the complex and lengthy red tape.

Nevertheless, the Government remains confident, and a Treasury Department spokeswoman has claimed the rate of loan modification completions will rise in the next few months.

Another scary fact is that the number of people entering the program is actually slowing down. In February 73,000 signed up, which represents only half the number of homeowners that did so in October and November.

In conclusion, although the Government is starting to make a substantial dent in the number of homeowners it is offering help to; it is a far cry from the objectives the program set out to meet.

Related posts:

1. Treasury Moves The Goal Posts of HAMP and Lowers Expectations for the Loan Modification Program.
2. Loan Modifications Latest Figures, Limbo, Trial Purgatory And Other Horror Stories
3. Loan Modifications Are Going To Be Simpler, What Do You Need Now?

Related posts:

1. Treasury Moves The Goal Posts of HAMP and Lowers Expectations for the Loan Modification Program.
2. Loan Modifications Latest Figures, Limbo, Trial Purgatory And Other Horror Stories
3. Loan Modifications Are Going To Be Simpler, What Do You Need Now?