Thursday, January 7, 2010

Home Affordability Modification Program - The Troubling Reality

President Obama's Home Affordability Modification Program (HAMP) was intended with the purpose of keeping homeowners in their houses. Unfortunately, the idea was wonderful and the basic core concepts of the HAMP appear to be generated with good faith in mind but it lacks one key component-success in purpose. In other words, HAMP is failing and the troubling reality of the program is becoming very clear.

The HAMP was designed to get consumers to work directly with their mortgage company to get into a modification of their current mortgage payment. The program was intended to make the modification so the consumer could actually make a payment that they could afford. The amount of the payment is based upon the general economic principle that a mortgage payment should be about a third of the homeowner's income. The problem with this philosophy is that the principle owed to the mortgage company is too large to minimize to a third of the homeowner's income or the homeowner's income and other expenses cannot meet even the third payment.

However, there are more problems on the surface of the HAMP. Once a homeowner is initially accepted into the trial period, the homeowner is given the false hope that this is a final agreement. The "trial" period is exactly that-"a trial." It is not a final agreement. A homeowner can make all the required payments asked of them in this trial period and still not receive a final agreement from the mortgage company. The real issue is that a mortgage company is only required to "consider" the homeowner for the program. (See Home Affordability Modification Act 2009). A mortgage company is not required to do anything at all for the homeowner under the HAMP.

The troubling reality of the program is that a homeowner could make three months of payments and still not have a final agreement and still be facing a foreclosure sale. Unfortunately, the most common pattern that we are seeing with this program is that homeowners are making three months of the trial payments and then being denied without cause or for some superficial reason. If this should happen to you, you should immediately seek a bankruptcy attorney to ensure protection of your home from a foreclosure sale.

So what was once thought to be the hope of a nation is really a troubling facade.

If you have experienced the troubling reality of the HAMP, we want to hear from you. Please contact Jill Phillips, Esq at Consumer Debt Radio.

Article Source:,_Esq

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