The Treasury Department recently reported that for June 2010, the majority of borrowers who received permanent modifications through the government’s HAMP program are in fact benefiting from them and are continuing to remain in the program. 49,000 borrowers received a permanent modification in June 2010, bringing the total number of modifications to 389,000. About 91,000 borrowers dropped out of the program in June 2010 bringing the total number of drop outs to 530,000. The government reports also show that there were approximately 4,764 borrowers with permanent HAMP modifications behind in their payments at least 90 days, while about 53,041 borrowers were behind by more than 60 days.
So bottom line, about 30% of borrowers have received permanent modifications, while 40% have dropped out of the program. The report also reflects that homeowners have regained more than $1 trillion in equity since the first quarter of 2009. More than 6 million homeowners have refinanced resulting in an average monthly savings of approximately $150. Homeowners are getting help from government programs, and lenders have become more cooperative by agreeing to approve modifications, short sales and deeds in lieu of foreclosure.
Extra Relief for Unemployed Homeowners
Starting August 1, 2010, the government HAMP program is geared to offer extra help to unemployed homeowners by offering them a forbearance period of at least three months until they can find another job. Then the lender or loan servicer can re-evaluate the homeowner’s financial situation to see if they qualify for a modification if they want to keep their home. Unemployed homeowners who have been turned down previously for loan modifications will now qualify for a short sale or deed in lieu under the government's HAFA program if they cannot afford to keep their home.
Also, starting August 1, 2010, State Housing Finance Agencies (HFA's) in hardest hit states with high unemployment including North Carolina, Ohio, Oregon, Rhode Island and South Carolina can start using their $600 million in foreclosure-prevention assistance from the Housing Finance Agency Innovation Fund ("Hardest Hit Fund") under plans which have been approved by the Obama Administration. It is estimated that 50,000 homeowners will benefit from receiving this aid immediately.
The money will be allocated to unemployed homeowners to help them receive loan modifications on first and second liens and principal reductions. In addition, for homeowners who cannot afford to keep their homes, lenders/loan servicers and borrowers will receive cash incentives to participate in short sales and deeds in lieu of foreclosure transactions. Earlier this year, President Obama authorized $1.5 billion for the Hardest Hit Fund for homeowners in the five states that were hit the hardest by home price declines of more than 20% including Arizona, California, Florida, Michigan and Nevada.
Legal Assistance
If you do not qualify for government assistance modification, refinance or short sale/deed in lieu of foreclosure programs, you still may be able to obtain similar assistance from non-government programs by getting legal help from a foreclosure defense attorney. If you are facing foreclosure, an attorney can help you negotiate with your lender to try and save your property from going to foreclosure.
