St Louis Mortgage Experts Say HAMP Stopping Foreclosures Would Be A Miracle

There seems to be more and more discouraging news stemming from the overall failure of HAMP, the federal foreclosure prevention program, not just from mortgage and real estate professionals but from key Washington officials.

With letters being traded between Neil Barofsky, special inspector general for the Troubled Assets Relief Program (TARP), and one key senator, he has recently said in a report that the U.S. Treasury now expects only 1.5 million to 2 million homeowners to get mortgage relief.

Many feel that this would be nothing short of a miracle to help these millions of consumers needing assistance. But what of the other 2 million homeowners who have applied for the foreclosure prevention program?

The actual statistics may be surprising but only 200,000 homeowners have been able to go from their trial modification to a permanent loan status.

But if matters couldn’t be worse, the inspector general’s report warned that many borrowers are at risk of re-defaulting on their St Louis mortgages even after receiving help under the federal program.

Is this due to irresponsibility on the homeowner’s part? Consider this: Many of these consumers still owe significantly more money than their homes are worth. In addition, some have second mortgages or other debts that HAMP didn’t provide for.

One statistic that we will briefly mention in this article would be the amount of homeowners who were irresponsible and bought homes they knew they couldn’t afford, those who took adjustable rate mortgage (ARM) St Louis loans with interest only payments just to get into a bigger house they didn’t deserve and finally the ones that are guilty of getting the so-called “liars loan” or in other words those who lied on their stated income application.

Getting back to the matter at hand, Barofsky then shows his further skepticism basically saying that these loan modifications may not be the best program to continue offering. The Treasury department had other opinions as to the wide spread criticism.

In a long, drawn out response included in the report, Herbert M. Allison, assistant Treasury secretary for financial stability said the program “should be measured by how many eligible homeowners are able to avoid the pain and stigma of foreclosure by reducing their mortgage payments to affordable levels while either remaining in their homes or transitioning with dignity to more suitable housing. The number of permanent modifications is one element, but not the only element of gauging the success.”

It is rather interesting how politicians and their ever-so-loyal henchmen try to inadvertently, yet aggressively make excuses at why everyone is looking at things the wrong way except for them.

Allison seems to want everyone to understand that the important point is not the failing of HAMP, but that Barofsky is simply not measuring its lack of success in the correct manner.

Of course, I don’t even think the U.S. Treasury firmly believes that nonsense because Allison added that permanent modifications are really only one way to help struggling homeowners.

We cannot ignore the fact that these servicers are also offering other foreclosure prevention initiatives such as short sales as realistic alternatives.

The bottom line to all this was that the administration sold the American consumer on the fact that HAMP was going to be the ultimate savior in stopping foreclosures and steering this country back on course to a full recovery.

And as we are finding out, many of these modifications did not include a realistic principal reduction, which means in all likelihood, it will fail.

When applying for a St Louis lending loan or for the best St Louis mortgage rates, call the St Louis mortgage experts at 877-334-0210 or 314-334-0210 and ask for Steve, Doug or Floyd.