OregonianLive.com recently reported the following:
Democrats in Congress yesterday declared that President Obama’s HAMP program designed to help people avoid foreclosure had “failed miserably.” And a government watchdog criticized HAMP for “spreading out the foreclosure crisis” over several years by failing to help enough people.
A year into the program, which originally aimed to aid 3 to 4 million borrowers, servicers placed only 170,000 trial modifications into permanent status.
Meanwhile, a federal report showed that more than half of U.S. borrowers who received loan modifications on delinquent mortgages defaulted again after nine months, according to a federal report. The re-default rate of loans modified in the first quarter of 2009 was 51.5 percent by the end of the year.
Politics aside, this does NOT come as a surprise to me. The modification of loan program is a colossal failure and will continue to be so unless the federal government and the banking industry realize that loan modifications should FIRST help those who CAN AFFORD TO PAY.
That’s right – you need to modify the loans of people whose homes are adversely affected by declining values and the current foreclosure crisis. The people who have been paying on time, paying off their mortgages and are not delinquent should be given a chance to benefit from the current economic crisis?
Because they may be the next victims of the economic tsunami if they are not given a chance to recover some of the lost value of their property. I see it…on a daily basis…the great people of our nation who are tired of the struggle and they are wondering why they don’t catch a break.
The facts don’t lie – at least 50% of the people who have received the modifications (AND THERE ARE VERY FEW FOR THE RECORD – THIS IS A DEBACLE OF EPIC PROPORTIONS) have still defaulted after modification. The current system for loan modifications is not working on so many levels. But at the end of the day, if you can’t make your payments – loan modifications are just buying you a little more time before the foreclosure gavel strikes.
Either way – our government must fix this economic crisis, restore the housing market – and get people working. But most importantly – they need to RESTORE CONSUMER CONFIDENCE to all our citizens and not just those in financial distress. When will the good guys catch a break?