Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Economic News

Failed HAMP program blamed for onslaught of zombie homes

Zombie infection in America

In recent years, the term “zombie homes” has slowly grown in popularity as a term to describe the sitting foreclosures across the nation that pull down home values and infect neighborhoods with other zombie homes. Most recently used in CityWeekly.net, the Home Affordable Mortgage Program (HAMP) is the source of the zombie housing apocalypse, saying the program (along with other government programs and bank behaviors) pushed homeowners into foreclosure despite the goal being to prevent foreclosures.

We reported this week that the $1 billion Emergency Homeowners’ Loan Program will not even end up spending half of their budget because so few homeowners qualify under confusing and changing requirements. Now, the same is being said of HAMP which is already documented as a failed program, as housing advocates note the program actually pushed homeowners into foreclosure.

The Weekly tells the story of a homeowner who said the program strung her along with “promises of salvation” despite the bank proceeding with the foreclosure, a tale that housing advocates say they hear frequently from homeowners. Marco Fields of housing advocacy nonprofit, TEEMS Utah says HAMP has major flaws which have been “exploited and botched by loan servicers in a way that makes the problem worse.” Fields told the Weekly, “People think the foreclosures are going down—they’re not. What is happening is there are so many people defaulting that the banks can’t keep up with filing notices of default.”

Fields noted that the backlog of foreclosures not yet publicly posted is averaging three months and that by the end of 2011, there will be over 50,000 foreclosures in Utah alone, compared to 32,000 in 2010.

Advertisement. Scroll to continue reading.

Even Banks are confused

Bank of America spokesperson Rick Simon says that there have been inconsistencies and dozens of changes to HAMP’s guidelines, causing industry confusion and delays. “There was a traditional way these things worked,” Simon said, “and we’ve turned that on its end completely over the past two years.”

Fields says, “The problem is that the banks’ and investors’ guidelines change every four to six weeks, and the poor little homeowner who is trying to get some kind of relief gets stuck in this cycle and goes around and around.”

Some point the finger of blame at HAMP, others at the banks, others at the robosignature scandal, and yet others at government leadership both national and local, but the bottom line is that if banks are confused, homeowners are even more so, leaving a limping economy at a major disadvantage and susceptible to the spread of the terrifying “zombie homes” crisis.

Advertisement. Scroll to continue reading.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

42 Comments

Leave a Reply

Your email address will not be published.

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Advertisement

KEEP READING!

Business News

(Business News) When a well known Realtor and his loan officer wife get rich off of $50 million in falsified loans and wash profits...

Housing News

Although the average contract interest rate fell for many types of loans, mortgage application volume fell - the MBA points out that Columbus Day...

Housing News

One Bank of America employee has been charged with a scheme that put over $1 million in his pocket.

Housing News

If you follow the money at several major foreclosure mill firms, the abuses being discovered at various levels are astounding. One state is investigating,...

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.