Mortgage Modification Extended 2 More Years

Posted on July 8, 2013 at 11:21am by

Recognizing that many Americans are still faced with unrealistic mortgage payments, the White House recently announced it is extending the Making Home Affordable Program until 2015. This is important to struggling homeowners since the initiative includes the Home Affordable Modification Program (HAMP).

What is HAMP?

HAMP is a mortgage modification program implemented by the Obama administration to help lower monthly mortgage payments and prevent foreclosure. It rolled out in 2009 and was set to cease at the end of this year. However, the White House announced the program will now continue until 2015.

Eligible homeowners can work with their mortgage companies to refinance loans that originated prior to January 1, 2009. The refinance should lower a borrower’s monthly payment to about 31 percent of his or her annual household income, as well as reduce the overall interest rate of the loan. Lenders are encouraged to participate in the program because they receive an incentive fee from the Treasury department.

Results So Far?

The program has seen success. Since 2009 HAMP has assisted nearly 1.3 million homeowners, resulting in a median monthly savings of $546. The first quarter of this year saw 18 percent fewer foreclosures than last year. However, the slight increase in interest rates last month caused the refinance rate to drop 12 percent, according to the Mortgage Bankers Association. Despite encouraging home market statistics, many homeowners are still struggling and need to take advantage of mortgage modification. Recognizing this, HAMP is one method used to help more Americans stay in their homes and make them more affordable.

The economic downturns of the last few years have taken their toll on Americans. Mortgage modification is just one tool used to help people get back on their feet and take control of their finances. If you are struggling to make ends meet and find that your debts continue to grow, talk to an experienced attorney about your options. The Kansas City attorneys at The Sader Law Firm can help ensure you know all the tools available in order to avoid foreclosure. Contact us for a free consultation.