Home Loan Modifications Ending

December 29, 2016



The Home Affordable Modification Program (HAMP) was introduced in 2009 and established to help homeowners recover from the great housing bubble burst. The HAMP was part of the Making Home Affordable program (MHA) along with the Hardest Hit Fund program (HHF) that was under the Troubled Asset Relief Program (TARP). These programs were part of the Emergency Economic Stabilization Act of 2008 and put into place to help struggling homeowners avoid foreclosure.


HAMP and the entire MHA Programs had already been set to expire December 31, 2016. The last day of this year will be the last day to submit applications. The Modification Effective date must be on or before September 30, 2017. The HHF, which affects 18 states and the District of Columbia will continue and be in place until September 30, 2017. Colorado is not one of those 18 states.


The Federal Housing Finance Agency (FHFA) extended HARP until September 30, 2017. The FHFA has estimated that more than 300,000 homeowners could still benefit by refinancing through HARP.  The FHFA said they opted to extend it again in order to have a smooth transition into new refinancing that will be offered by Fannie Mae and Freddie Mac at the end of 2017. It’s been reported this program will be aimed at borrowers with a high loan-to-value ratio. Borrowers who are current on their mortgage but unable to refinance through traditional lenders will benefit from this program. The HHF has been extended to 2020.


The election is over, neither party spoke or offered solutions to the housing market. President-elect Trump had hinted to “Make America Great Again’ by boosting home ownership through demand-side policies such as financial deregulation. Housing is central to every American. Housing is intertwined where we live, what schools our children go to, where our jobs are and what local businesses and restaurants we frequent. Housing is a huge part of our lives and the economic impact upon each person, whether buying or renting a home is profound.


The Mortgage Bankers Association congratulated President-elect Trump and outlined what is needed. CEO David Stevens said “It is critical that President Trump focus on three main areas - ensuring an adequate supply of affordable housing, bringing first time homebuyers back into the housing market and ensuring certainty in regulations.”


The interest rates have been teetering all year, threatening to rise almost monthly. The federal government raised the rates in December 2016 and has planned more rate hikes in 2017.  Freddie Mac also raised their interest rate slightly today from 3.54% to 3.57% on long-term loans. 


President-elect Trump opposes interest rate hikes, saying we’re in another bubble and if the interest rates were raised, even a little, it’ll come crashing down. He has said there are parts of the Dodd-Frank Act he would keep.


If you need a loan modification, your best bet is to act quickly.  If you fear you will miss the deadlines for HAMP or HARP, you should contact an attorney immediately. Gantenbein Law Firm's attorneys, based in Denver and serving clients throughout all of Colorado, are experienced in foreclosure and loan modification issues and can help.


Many foreclosure and debt forgiveness issues have tax consequences. Traditionally, the forgiveness of debt is considered to be taxable income. As such, if a debt is forgiven, there may be tax consequences for that forgiven debt. As a result of the mortgage crisis, the Obama administration passed the Mortgage Forgiveness Debt Relief Act which treated any forgiven mortgage related debt as non taxable. However, that act is set to expire at the end of this year and it is not known whether it will be extended once again. Our Denver tax attorneys can assist with all tax issues, including debt forgiveness, tax audits, tax litigation and more.


In addition to Foreclosure Defense and Tax Law, Gantenbein Law Firm also practices law in the areas of Business Law, Real Estate Law, HOA Law, and Estate Planning, Wills and Trusts. For more information on our areas of practice, attorneys, location and hours, visit www.gantenbeinlaw.com or call 303-618-2122.



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