The HAMP program that was unveiled by the Obama administration in 2009 was supposed to provide financial relief to millions of homeowners across the country who were buckling under the strain of overwhelming mortgage payments. However, almost 3 years and many billions of dollars down the line, foreclosures continue to take place across America at an alarming rate.
To date, despite all the energy and resources that have been allegedly invested into making this program a reality, only around 14% of all homeowners who are eligible for the program and who have applied, have received the loan modification that they are in desperate need of. Some real estate experts believe that the core problem lies with banking practices that provide banks with little to no incentive to follow through with objective of helping borrowers modify their mortgages.
Banks are for the most part unaffected by the housing market conditions that are making life a nightmare for so many Americans. Between mortgages that are insured, and heaps of federal bailouts, most banks could hardly care less about taking steps to provide homeowners with assistance. In fact, in most cases, banks actually view it as more cost-effective to foreclose on a home rather than aide the individual or family in question in keeping it.
In a situation where a bank extends someone a mortgage where a 20% deposit has not been put down, the borrower is typically required to obtain private mortgage insurance (PMI) that is intended to cover any losses in the event of the borrower being unable to keep up with the loan payments. Therefore, when a mortgage falls behind, banks in this situation really lose nothing by simply moving ahead with the foreclosure process. And for any loss that isn’t covered by the relevant PMI, there is almost undoubtedly a huge amount of taxpayer cash running through Fannie and Freddie what will allow them to make up the difference.
There have been cases where banks have flat out stated that they would sooner simply foreclose on a homeowner, rather than ‘wasting time’ in negotiations that can take months or even years. It is far easier for banks to adopt this callous attitude when the homeowner has no clarity regarding what they are actually entitled to based on their circumstances. People tend not to fight for what they don’t know is owing to them. It’s the reason why so many lenders prefer to keep borrowers ignorantly fumbling around in the dark, because it places far less strain on these lenders to take steps that ensure that these homeowners receive the assistance that they qualify for.
The key to submitting a loan modification with boldness and peace of mind is having a crystal clear understanding of your pre-qualification status, based either on HAMP or private loan modification guidelines. If you are able to demonstrate clearly that you adhere to all the requirements laid out by these programs, then it stands to reason that the loan modification you are applying for must be granted, and if it’s not, you have the grounds on which to take decisive and focused legal action if and when necessary.
Loan modification programs were meant to provide struggling homeowners with real assistance in the midst of overwhelming financial hardship. As long as these programs exist, Mycaal.com helps you tap into the benefits of these programs in the most effective way possible.
About Carla Ghosn
|CEO and Founder of Caal (mycaal.com) keen on helping American homeowners save their home. If you need help with your loan modification, visit www.mycaal.com to get help on pre-qualifying your loan for approval, as well as preparing and printing your loan modification package online.|