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Mortgage Professionals Realize HAMP Not Halting St Louis Mortgage Foreclosures


With the numerous reported failures of the federal program known as HAMP, inside senior legislators appear to be jumping on the band wagon sharing their new found pessimistic viewpoints on where this system may be headed.

There were notices recently shuffled amidst one key senator and Neil Barofsky, special inspector general for the Troubled Assets Relief Program (TARP), on the matter of HAMP with Barofsky stating that over one-and-a-half million or so homeowners would get any type of mortgage assistance.

But the worrying reports is that approximately 4 million homeowners including St Louis home loan owners that actually need this federal assistance. Yet, most experts are despondent at the reality of this amount being attained.

The reason for this bleak outlook is that just under 200000 or five percent have actually moved on from the testing docket into a permanent modification mode.

But if matters couldn't be worse, the inspector general's release warned that many consumers are at risk of re-defaulting on their St Louis mortgage loans even after receiving help under the federal system.

Again the critics are coming out of the wood works suggesting that these mortgage owners are irresponsible. But the verity of the matter is, many still owe more money than what their property is worth not mentioning that others have second mortgages.

Without digressing to a great degree, I think its fair to mention the abominable acts of not just the huge insurance and banking leviathans but the average person who bought a house they knew they just couldn't afford and did it by taking the only type of loan that could give them this undeserved asset. Then you have the pure fraudulent exploits of those who knowingly lied on their stated income application. Three years later, these things have come to be known as "liar loans."

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

In a long, drawn out response included in the report, Herbert Allison, assistant Treasury secretary for financial stability said the system "should be measured by how many eligible mortgage owners are able to avoid the pain and stigma of foreclosure by lowering their mortgage payments to affordable levels while either residing 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."

Whether this federal program meets its overall success or failure is second only to the fact that these main officials want us to view their ideologies from their viewpoint and no other.

Allison seems to want everyone to understand that the important significance is not the failing of HAMP, but that Barofsky is simply not assessing its lack of success in the correct manner.

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

We cannot ignore the fact that these services are also offering numerous foreclosure prevention initiatives such as short sales as realistic options. It is sad that many of these homeowners both nationally and locally can no longer qualify for any type of St Louis refinancing options.

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

And as we are finding out, many of these modifications did not include a realistic principal reduction, which means in all likelihood, they will continue to fail.

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