Are the Home Affordable Modification Program (HAMP) and Home Affordable Refinance Program (HARP) really be ending at the end of this year?
The Federal Housing Finance Agency (FHFA) Director Mel Watt gave a speech last year on both HAMP and HARP programs. He revealed that HAMP would be finished at the end of 2016. Concerning HARP, Watt said ‘we anticipate that this will also be the final extension for HARP.”
Originally set to expire at the end of December 2013, the programs were extended each year for three years and the process was streamlined. FHFA Director Mel Watt also said the programs weren’t designed to keep renewing each year. His statements do signal the end of both programs December 31, 2016.
Introduced back in 2009, HAMP and HARP have helped distressed homeowners avoid foreclosure and/or save money on their monthly mortgage payments. Original estimates thought as many as 9 million homeowners would benefit from the programs. Around 2.3 million trial modifications have been started but estimates place only around 1.5 million homeowners have been helped though the programs. Nearly 800,000 did not or could not complete the trial periods.
The HAMP goal was set up to get the front-end ratio down to 31% by reducing the interest rate, potential forgiveness and/or extending the loan. Around 95% of the HAMP loans received an interest reduction - but the reductions are temporary, not permanent. Interest rates on HAMP loan mods increase after five years of monthly payments, then increase each year for three or four years until it reaches the market rate (at time of modification). Around 60% of the HAMP borrowers received an extension (i.e., another 15-30 years are added to the loan). Less than 30% received a principal forbearance.
After receiving the HAMP loan, borrowers who were on time making all payments receive up to $5,000 in forgiveness on their loans. In December 2014, the Department of Housing Urban Development (HUD) and the U.S. Treasury Department added another $5,000 for on-time borrowers in their sixth year of the loan mod bringing the total to $10,000 taken off their loan.
The HARP program allowed borrowers who were “underwater” (owing more than what their home is worth) with Fannie Mae and Freddie Mac-backed mortgages to refinance at lower interest rates. Around 3.3 million borrowers took advantage of this program.
If you need help with your mortgage, or are facing foreclosure, a qualified foreclosure defense attorney can help you. Gantenbein Law Firm have defenses they can pursue on behalf of distressed homeowners and strategies including Cash for Keys, post-foreclosure litigation, judicial set-asides, recissions and negotiating post-foreclosure loan modifications.
If you are facing foreclosure, or need foreclosure or loan modification help, contact our Denver, Colorado based law, Gantenbein Law Firm, at 303-618-2122 to schedule a consultation of your case. Our lawyers will review your case and give you your best options for retaining your home.
Gantenbein Law Firm also practices Real Estate Law, including HOA Defense, Business Law, Wills, Trusts, Estate Planning & Credit Dispute. For more information, visit our website at www.gantenbeinlaw.com.