While the number of homeowners who enter the Treasury Department’s Home Affordable Mortgage Program (HAMP) program is starting to slow down, the amount of homeowners dropping out of the program is going up.
It is estimated that there have been 1.43 million trial loan modifications that were started since the HAMP program began last year. Of that amount, roughly 46 percent have been cancelled due to the borrowers not being able to make payments or failing to comply with requirements of the program.
The plan was aimed to help up to 4 million homeowners, but now the Congressional Oversight Panel has made a report that states it may only help 750,000 borrowers.
The Congressional Oversight Panel stated that one reason why the program’s effect will be limited is that the loan servicers find it more profitable to foreclose than to give a loan modification. HAMP gives incentives to these servicers if they participate, but do not provide any penalty for not doing so.
What do you all think?