Bank Loan Modifications Greatly Outpace HAMPs
Bank Loan Modifications Greatly Outpace HAMPs
Bank Loan Modifications Greatly Outpace HAMPs
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February 3, 2011 (Chris Moore)
mortgage-saved-image
No matter which side of the fence you sit on when it comes to who you want to blame for the whole housing crisis and no matter how many bank foreclosure horror stories you hear of or read about, there’s one thing you can’t deny, bank mortgage loan modifications outnumber HAMP mortgage loan modifications by almost four to one.

The Treasury Department reported Monday that the government’s Home Affordable Modification Program, or HAMP, had provided permanent help to 521,630 homeowners since the program began in spring 2009. By comparison, over the same period, banks negotiating directly with borrowers have made about two million permanent loan modifications outside the government’s program.

And while bank modification programs are on the rise, HAMP mortgage loan modifications are tapering off. Critics of HAMP say the program has made little impact on the housing market and should be ended. Last week, House Republicans introduced a bill to end the effort, calling it a “colossal failure,” citing that over twice as many borrowers have dropped out of their HAMP trial modifications than have successfully received a permanent loan modification. Ironically, almost half of those who have dropped out of HAMP received a loan modification from a private lender.

Banks say they are doing more of their own modifications, and fewer HAMP modifications, because eligibility requirements for HAMP are more stringent. Once a borrower is deemed ineligible for the government program, a modification worked out directly with the bank sometimes is the best option.

Although Republicans continue their call for the end of HAMP, administration officials continue to defend the plan.

“I think we’ve got to remember that HAMP has achieved over a half-million modifications. These are people that make $50,000 a year, so to sort of write it off and say, ‘Well, it’s a failure,’ I think is not really appropriate,” said Tim Massad, an acting assistant Treasury secretary, in a hearing on Capitol Hill last week.

While critics may say that banks got off to a slow start with loan modifications, others are saying banks have been more willing to modify loan terms because it’s starting to be cheaper than completing a foreclosure, which with the current glut of distressed housing inventory, can take years to process and thousands of dollars in legal fees to complete.

One of the banks that has greatly increased their loan modifications is Wells Fargo. The bank will be holding 20 large scale mediation sessions across the country this year in an attempt to reach out to 150,000 borrowers who have missed payments or who have been in previous loan modification proceedings which they hope will result in new loan modifications.

Loan modifications generally result in reduced interest rates, forgoing late fees or extending the terms of loans. In the third quarter, modifications done in the HAMP program reduced monthly payments by an average of $585, almost double the $332 reduction in payments for modifications done outside the HAMP program

Not every mediation or modification results in significant savings for homeowners and it’s not clear how these modifications will perform over time. But a recent study by the Treasury Department reported that 20.4 percent of year-old modifications were already 60 or more days delinquent.

Tags: HAMP, mortgage, mortgage lenders, loans, borrowers, loan modifications, banks, permanent loan modification, interest rates, late fees, extend loan terms, loan mediation

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Mortgage
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Estimate your monthly mortgage payment
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Calculator

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15 Year vs 30 Year
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Todays Mortgage
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February 3, 2011 (Chris Moore)
mortgage-saved-image
No matter which side of the fence you sit on when it comes to who you want to blame for the whole housing crisis and no matter how many bank foreclosure horror stories you hear of or read about, there’s one thing you can’t deny, bank mortgage loan modifications outnumber HAMP mortgage loan modifications by almost four to one.

The Treasury Department reported Monday that the government’s Home Affordable Modification Program, or HAMP, had provided permanent help to 521,630 homeowners since the program began in spring 2009. By comparison, over the same period, banks negotiating directly with borrowers have made about two million permanent loan modifications outside the government’s program.

And while bank modification programs are on the rise, HAMP mortgage loan modifications are tapering off. Critics of HAMP say the program has made little impact on the housing market and should be ended. Last week, House Republicans introduced a bill to end the effort, calling it a “colossal failure,” citing that over twice as many borrowers have dropped out of their HAMP trial modifications than have successfully received a permanent loan modification. Ironically, almost half of those who have dropped out of HAMP received a loan modification from a private lender.

Banks say they are doing more of their own modifications, and fewer HAMP modifications, because eligibility requirements for HAMP are more stringent. Once a borrower is deemed ineligible for the government program, a modification worked out directly with the bank sometimes is the best option.

Although Republicans continue their call for the end of HAMP, administration officials continue to defend the plan.

“I think we’ve got to remember that HAMP has achieved over a half-million modifications. These are people that make $50,000 a year, so to sort of write it off and say, ‘Well, it’s a failure,’ I think is not really appropriate,” said Tim Massad, an acting assistant Treasury secretary, in a hearing on Capitol Hill last week.

While critics may say that banks got off to a slow start with loan modifications, others are saying banks have been more willing to modify loan terms because it’s starting to be cheaper than completing a foreclosure, which with the current glut of distressed housing inventory, can take years to process and thousands of dollars in legal fees to complete.

One of the banks that has greatly increased their loan modifications is Wells Fargo. The bank will be holding 20 large scale mediation sessions across the country this year in an attempt to reach out to 150,000 borrowers who have missed payments or who have been in previous loan modification proceedings which they hope will result in new loan modifications.

Loan modifications generally result in reduced interest rates, forgoing late fees or extending the terms of loans. In the third quarter, modifications done in the HAMP program reduced monthly payments by an average of $585, almost double the $332 reduction in payments for modifications done outside the HAMP program

Not every mediation or modification results in significant savings for homeowners and it’s not clear how these modifications will perform over time. But a recent study by the Treasury Department reported that 20.4 percent of year-old modifications were already 60 or more days delinquent.

Tags: HAMP, mortgage, mortgage lenders, loans, borrowers, loan modifications, banks, permanent loan modification, interest rates, late fees, extend loan terms, loan mediation

FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateNetwork and the offers you have received, you've found the right product and the best rate.
HOW LOANRATENETWORK
LOAN CENTER WORKS
ADVANTAGES OF USING
LOANRATENETWORK
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.
Helpful Tools

February 3, 2011 (Chris Moore)
mortgage-saved-image
No matter which side of the fence you sit on when it comes to who you want to blame for the whole housing crisis and no matter how many bank foreclosure horror stories you hear of or read about, there’s one thing you can’t deny, bank mortgage loan modifications outnumber HAMP mortgage loan modifications by almost four to one.

The Treasury Department reported Monday that the government’s Home Affordable Modification Program, or HAMP, had provided permanent help to 521,630 homeowners since the program began in spring 2009. By comparison, over the same period, banks negotiating directly with borrowers have made about two million permanent loan modifications outside the government’s program.

And while bank modification programs are on the rise, HAMP mortgage loan modifications are tapering off. Critics of HAMP say the program has made little impact on the housing market and should be ended. Last week, House Republicans introduced a bill to end the effort, calling it a “colossal failure,” citing that over twice as many borrowers have dropped out of their HAMP trial modifications than have successfully received a permanent loan modification. Ironically, almost half of those who have dropped out of HAMP received a loan modification from a private lender.

Banks say they are doing more of their own modifications, and fewer HAMP modifications, because eligibility requirements for HAMP are more stringent. Once a borrower is deemed ineligible for the government program, a modification worked out directly with the bank sometimes is the best option.

Although Republicans continue their call for the end of HAMP, administration officials continue to defend the plan.

“I think we’ve got to remember that HAMP has achieved over a half-million modifications. These are people that make $50,000 a year, so to sort of write it off and say, ‘Well, it’s a failure,’ I think is not really appropriate,” said Tim Massad, an acting assistant Treasury secretary, in a hearing on Capitol Hill last week.

While critics may say that banks got off to a slow start with loan modifications, others are saying banks have been more willing to modify loan terms because it’s starting to be cheaper than completing a foreclosure, which with the current glut of distressed housing inventory, can take years to process and thousands of dollars in legal fees to complete.

One of the banks that has greatly increased their loan modifications is Wells Fargo. The bank will be holding 20 large scale mediation sessions across the country this year in an attempt to reach out to 150,000 borrowers who have missed payments or who have been in previous loan modification proceedings which they hope will result in new loan modifications.

Loan modifications generally result in reduced interest rates, forgoing late fees or extending the terms of loans. In the third quarter, modifications done in the HAMP program reduced monthly payments by an average of $585, almost double the $332 reduction in payments for modifications done outside the HAMP program

Not every mediation or modification results in significant savings for homeowners and it’s not clear how these modifications will perform over time. But a recent study by the Treasury Department reported that 20.4 percent of year-old modifications were already 60 or more days delinquent.

Tags: HAMP, mortgage, mortgage lenders, loans, borrowers, loan modifications, banks, permanent loan modification, interest rates, late fees, extend loan terms, loan mediation

HOW LOANRATENETWORK
LOAN CENTER WORKS
FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateNetwork and the offers you have received, you've found the right product and the best rate.
ADVANTAGES OF USING
LOANRATENETWORK
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT
CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.