The Real Estate Bloggers

Auditors Say HAMP Made Many Homeowners Worse Off

Posted: 26 Oct 2010 04:44 AM PDT

Money_dn_drain President Obama’s Home Affordable Modification Program (HAMP) has been such a failure that even the auditors can not cover it up. The promise that HAMP would bring relief to 3–4 million households has proven to be a false promise and instead ended up creating more turmoil for home owners.

People who apply for modifications via HAMP sometimes “end up unnecessarily depleting their dwindling savings in an ultimately futile effort to obtain the sustainable relief promised by the program guidelines,” the report notes, putting the imprimatur of the federal government on a claim long made by housing experts and homeowner advocates. “Others, who may have somehow found ways to continue to make their mortgage payments, have been drawn into failed trial modifications that have left them with more principal outstanding on their loans, less home equity (or a position further ‘underwater’), and worse credit scores.

“Perhaps worst of all,” it continues, “even in circumstances where they never missed a payment, they may face back payments, penalties, and even late fees that suddenly become due on their ‘modified’ mortgages and that they are unable to pay, thus resulting in the very loss of their homes that HAMP is meant to prevent.” via The Huffington Post

What was promised as a permanent fix for a troubled family has now turned into a death spiral for them economically. They are convinced to use their savings to get caught up for the trial modification, then face significant penalties and fees when the modification is canceled. This leaves the homeowners is a much worse position than if they never tried HAMP.

Like so many of the policies coming out of Washington these day, HAMP is being used to enrich the large banks off the backs of middle class Americans. First they wrote mortgages people could never be expected to pay at the governments urging, then these same banks lobbyists get legislation purported to help the homeowners with tax money but all it does is put them in a deeper hole.

Washington – Big Business – Unions. They are all digging into your pockets at every opportunity to enrich themselves.

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Auditors Say HAMP Made Many Homeowners Worse Off