National Closing Center

Posts Tagged ‘HAMP’

At least that what WJS blog suggests. According to their recent post, failures of HAMP are well documented, and it’s cousin HAFA seems to be following HAMP’s footsteps:

HAFA was designed as a cousin to the Obama administration’s Home Affordable Modification Program, HAMP, whose woes have been well documented. HAFA works like this: Servicers are supposed to consider short sales for borrowers who aren’t able to receive a HAMP modification. Because some 700,000 HAMP applicants have been ejected from that program, there’s a potentially large pool of borrowers who might be evaluated for HAFA.

Initially announced in May 2009, HAFA was also designed to help reduce wait times by streamlining the short sale process through standardized documents and approaches for short sales.

(…) “It looks good on paper, but you can’t make anyone participate,” says Kevin Kauffman, a Phoenix real-estate agent who says he’s closed 150 short sales but has yet to complete one through HAFA.

Once again, WJS is always quick to judge current administration’s actions. On the other hand, they are right that HAMP more or less is a failure. As for HAFA, it also depends a lot not only on lenders, but on processors. If whoever is trying to negotiated the short sale does not know what they are doing, no government program will be able to help them.

While success rate for HAMP hasn’t been what the government or servicers hoped, changes that made along the way will help improve it, but the continuous changes are also part of the frustration in trying to manage the program, said Mark D. Spangler, assistant vice president, section manager, with Huntington Home Savers Group. The group is part of Huntington National Bank.

Longterm, HAMP “wasn’t meant to be an end-all, be-all” and there are many other programs out there to assist borrowers, Brewer said.

It’s clear that HAMP is something servicers are stuck with and they are reluctant to call it a failure as there is very unlikely anything better is going to emerge any time soon. However, the biggest problem is the conspicuous fact that many borrowers even after the loan modification canno afford their loans.

In many cases loan modification only delays the real solution for the problem, that is a short sale or even a foreclosure. Even if short sale still quite often gets a bad rap in the press, it obviously is a better solution than foreclosure.