When this program was announced, we thought most of the homeowners will get modification and can avoid foreclosure. According to the program, it was originally projected that around 3 to 4 million homeowners’ loan would be modified but what is the real number as of now?

How many homeowners have been granted the government loan modification program called HAMP?

Here’s the article from Huffingtonpost by Arthur Delaney which shows the actual number of homeowners who were granted permanent HAMP modification, you will be surprised to know the results:

WASHINGTON — The U.S. Treasury Department announced Wednesday that more than 600,000 homeowners across the country have been granted “permanent” mortgage modifications under the Obama administration’s signature anti-foreclosure effort, the Home Affordable Modification Program.

The latest monthly release shows, however, that more than 800,000 homeowners have been bounced out of HAMP as of January.

So-called permanent modifications, which last for five years, typically reduce struggling borrowers’ monthly payments by roughly $500 through reductions in the interest rate, extensions of the mortgage terms and temporary forbearance (though not forgiveness) of principal owed.

Of the 607,607 permanent modifications that have been started since HAMP’s 2009 launch, 68,114 have been canceled. That means only 539,493 homeowners remain in active modifications. Combined with the three-month “trial” modifications that have been canceled instead of made permanent, 808,354 homeowners have been booted from the program.

When HAMP was announced, President Barack Obama said it would modify mortgages for 3 to 4 million homeowners. The Treasury Department has since disavowed that goal, arguing instead that the benefit of HAMP is that it has given foreclosure-bound homeowners a softer landing, soothed the devastated housing market and raised standards for the mortgage servicing industry.

A Treasury official said Wednesday that “by setting affordability standards and developing a framework for how mortgage servicers provide assistance to struggling families, HAMP has established critical protections for homeowners and has catalyzed improvements in modifications industry-wide.”

Borrowers are eligible for HAMP if they meet several criteria, the most important of which is monthly payments that eat up more than 31 percent of monthly income. Servicers get $1,000 incentive payments for permanent mods, but housing experts have said servicing incentives remain tilted toward delinquency and foreclosure. Despite clear eligibility criteria, many borrowers have found themselves trapped in trial modifications that inexplicably drag on for far longer than the standard three months, as banks lose paperwork while simultaneously threatening to foreclose

Federal auditors of the program have said that the program can make homeowners worse off and, in some cases, even cause the foreclosures it’s designed to prevent. The problem, critics say, is that mortgage servicers face no penalties for violating program guidelines, because HAMP is voluntary.

“The fundamental flaw from the beginning was presuming the people who caused the mortgage crisis were somehow going to act in the public interest,” said Prentiss Cox, a law professor at the University of Minnesota. “What was needed was, ‘We just bailed you out with a trillion dollars and in return we’re going to hit you in the head with a two-by-four if you don’t [act in the public interest].’”

Congressional Republicans have introduced legislation to repeal HAMP, calling it a “colossal failure.”

When homeowners face hardship, they think about loan modification first before going for any other options to save home from foreclosure. Some homeowners get their payment lower but most of the homeowners are frustrated with their loan modification programs.

I know few families in Bay area who are working on loan modification for a long time but bank still didn’t approve it. One of the family, who lives in Fremont called me and told me that they were doing loan modification for the past 8-9 months and now they have received trustee sale notice to move out of the house.  It is really frustrating to hear about the trustee sale news when the homeowner worked whole heartily to save the house.

According to Reuters news, a release from the Treasury and the Housing and Urban Development departments on the Making Home Affordable Program, or HAMP, showed nearly 700,000 have had trial modification programs canceled by the end of September.
The most common causes for canceling trial modifications were insufficient documentation and trial payment defaults and ineligibility on the part of homeowners whose housing expense was already less than 31 percent of their household income.

“The program wasn’t designed to try to prevent every foreclosure but instead to help people who could sustain a loan modification,” said Tim Massad, acting assistant Treasury secretary for financial stability.

Check this video, which I just watched in PBS news. In this video, you will see the frustrations of actual homeowners regarding loan modification.

Before working on loan modification, first check whether you are eligible for loan modification or not, you can call the lender directly and don’t have to give any money for your loan modification.

If you are in Bay area and would like more information on loan modification or short sale, please call me at 510-366-9405, I would be more than happy to assist you and my service doesn’t cost you anything. It’s my free service for homeowners who are in difficulty and need my help.

It’s little bit confusing which one to try first when you face the hardship and you have the monthly mortgage payment to pay.  You get lots of advices from everywhere or even if you search on Google,  you will find lots of different suggestions.  Well, It all depends on your current financial situation and your decision whether to stay in your house or to sell it.

I know some home owners who had asked me the same question – “Should I do loan modification or short sale?“  So, I have created a small video where you can see me explaining about loan modification and short sale.

I hope the above video helps you to decide which one is good for you according to your current situation. But if you have further questions or need my help to decide which might be good for you(loan modification or short sale), then please don’t hesitate to contact me at 510-366-9405 or email me.

Currently, there are many lawyers who are helping help homeowners to modify their mortgage, well, do you think that all lawyers are good in helping homeowners with their loan modification? The answer is, No, not all lawyers are good in helping homeowners in loan modification.

I just read one article today in kansascity.com that one homeowner contacted the United Law Group for his loan modification and paid upfront $2,000 for their service and they even promised that they will delay his foreclosure with “forbearance” but they failed to do that also and the homeowner hired another lawyer to file bankruptcy. He got lucky that bank agreed a new payment plan and saved his house. But, not everyone is getting lucky at that last moment of facing foreclosure.

The California State Bar is investigating more than 400 lawyers who are suspected of ripping off thousands of homeowners nationwide.  I think that recent foreclosures attracted many lawyers to get into this side of business to make more money.

One of friend’s coworker contacted an attorney to do the loan modification and they asked to pay upfront $3,500 which she couldn’t afford and they suggested that “miss your payment in order to pay their fees”.  I think that is unethical advice to miss the monthly mortgage payment in order to pay the lawyers fees. 

The sad thing is these lawyers don’t even check whether the homeowner can even qualify for loan modification or not, they just get their fees and give promises that they can modify their loan, but in reality, you cannot promise that the bank will modify the loan or not or what kind of modification the homeowner will get.

There are certain criteria in order to qualify for loan modification, so check those qualifications with your lender, lawyer or experienced real estate agent before you work on your loan modification process.  If you do not qualify for loan modification then check other alternatives like short sale.

My advice to homeowners is that, you need to check any reference or lawyer’s background before you even begin working with them for your loan modification. Ask them “how many loan modifications did they complete successfully” and ask for reference and give them a call to check how the lawyer did their loan modification and what kind of modification did they get.   You can also work directly with your lender without paying any fees to anyone to modify your loan. Many homeowners are getting success working directly with the bank to modify their loan.

Let me know if you have any questions on loan modification, you can reach me at 510-366-9405, I would be happy assist you.

If you are doing loan modification and not getting any response from your loan modification company then you better check whether that company is still around or not.

The new law which passed requires the loan modification company to get $75,000 surety bond.  This bond is to make sure that these loan modification companies do their job and this also protects the homeowner. If these companies do not keep up their promise to modify the loan, then there’s a provision where home owners can get their money back.

According to lasvegasnow.com, 30 loan modification companies will be shut down on 11/3/09 for not following the new law. Under the new law, if the company operates without license then they can face criminal charges and fines.  Elisabeth Daniels with the Department of Business and Industry says companies that failed to comply will be forced to stop operating.  She said “They will have 10 days to show they have stopped business, closed up shop and that they have refunded the customer what they owe to them based on contract that they have with customer homeowner”

I’m sure this new law will change the way these loan modification runs their business and many homeowners can be protected from these scammers.

Homeowners who are facing difficulty and cannot pay your current monthly mortgage payment then contact your bank directly for loan modification.  You don’t have pay any dime to these loan modification companies since you can do it for free by contacting your bank. Don’t wait too long to do anything to avoid foreclosure.

If you are in bay area and would like to know more about loan modification, short sale or to sell your house then you can call me at 510-366-9405, your bay area short sale specialist and I would be happy to assist you or call me even if you would like to say hi to me.