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St Louis Mortgage Professional Says HAMP Stopping Foreclosures Would Be a Miracle

Key inside officials on Capitol Hill seem to be joining the criticism involving the federal foreclosure prevention program known as HAMP due to its numerous failures including their cynical outlook on where its heading.

With letters being traded between Neil Barofsky, special inspector general for the Troubled Assets Relief Program (TARP), and one key senator, he has recently said in a report that the U.S. Treasury now expects only 1.5 million to 2 million homeowners to get mortgage relief.

But the sobering news is that nearly 4 million consumers actually need this federal assistance. Yet, most experts are despondent at the reality of this number being attained.

The reason for this bleak outlook is that fewer than 200,000 or five percent have actually advanced from the trial program into a permanent modification mode.

But if matters couldn't be worse, the inspector general's report warned that many borrowers are at risk of re-defaulting on their St Louis mortgages even after receiving help under the federal program.

Is this due to irresponsibility on the homeowner's part? Consider this: Many of these consumers still owe significantly more money than their homes are worth. In addition, some have second mortgages or other debts that HAMP didn't provide for.

The detestable statistics that will be briefly mentioned may be those thousands of homeowners who were indeed irresponsible to the point of buying homes they knew they couldn't afford. And what is worse is the multitude of consumers who blatantly lied on their applications when it came to the now infamous stated income loans or what others call "liar loans." These are the very one who helped create this mortgage fiasco alongside the insurance and banking behemoths.

Getting back to the matter at hand, Barofsky then shows his further skepticism basically saying that these loan modifications may not be the best program to continue offering. The Treasury department had other opinions as to the wide spread criticism.

In a long, drawn out response included in the report, Herbert M. Allison, assistant Treasury secretary for financial stability said the program "should be measured by how many eligible homeowners are able to avoid the pain and stigma of foreclosure by reducing their mortgage payments to affordable levels while either remaining in their homes or transitioning with dignity to more suitable housing. The number of permanent modifications is one element, but not the only element of gauging the success."

It is rather interesting how politicians and their ever-so-loyal henchmen try to inadvertently, yet aggressively make excuses at why everyone is looking at things the wrong way except for them.

What Allison, in reality, was saying is that the problem is not in the failing of HAMP, but rather that Barofsky and other critics are not measuring its lack of success the correct way. Oh, really.

Since Allison clearly points out that permanent modifications are really only one way to help struggling homeowners, this somehow suggests that he himself doesn't firmly believe his previous comment.

And we shouldn't fail to mention that these very servicers offer other foreclosure prevention options such as short sales as needed alternatives.

Yet, most people who have been following this program from its inception were spoon fed the amazing idea that permanent loan modifications through HAMP was the best and perhaps the only way the country would see this insurmountable amount of foreclosures go away.

And as many homeowners have found out, if their modification does not include a worthwhile principal reduction, it will in time fail the consumer.
About Author Floyd J. Tapia :

If you are wanting to discuss some of the best St Louis home loan options on a St Louis mortgage or a St Louis refinancing loan, visit our websites at <a href="" target="_blank"></a> or <a href="" target="_blank"></a> or call Steve, Doug or Floyd at 877-334-0210 or 314-334-0210.

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Article Added on Thursday, July 14, 2011
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