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Opinion Editorials

Home Affordable Mortgage Program fails miserably

HAMP continues to fail

Here at Agent Genius, many articles have been written regarding the failure of the Home Affordable Modification Program (HAMP) and today’s report released by Fitch Ratings shows that 65%-75% of loans modified through HAMP default.

On the heels of HAMP’s various other failures, the core mission to help struggling homeowners seems to be effective a mere 25%-35% of the time (that is after the few applicants that make it through the mounds of red tape and whose paperwork is not lost).

According to CNN, the Fitch report points to HAMP’s failure being that most applicants struggle with all of their debts, not just mortgage, and borrower behavior continues regardless of help. The report notes that “on average, HAMP-modified borrowers have 64% of their monthly pretax income spent before they even buy a quart of milk.”

Helping homeowners

The report calls for the administration to help with all debt and although I continue to see HAMP as a colossal failure and I don’t personally support the program, I think the core mission of HAMP has the potential to help and I feel that the administration giving an overall debt relief package to struggling homeowners won’t fix anything.

HAMP could include debt counseling as an option for their modification plans, but HAMP has bigger problems than borrower behavior if only 25% of applicants don’t default. Can you imagine what would happen to a lender if 75% of all of their loans defaulted?

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If HAMP continues to fail, what do you think the government could do to help struggling homeowners? Or do you think the market should level out naturally without government assistance?

Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.



  1. Laguna Beach Homes For Sale

    June 17, 2010 at 6:51 am

    Really Mortgage Program looks good on paper,but fails miserably in practical application.Very sad..

  2. Joe Loomer

    June 17, 2010 at 7:14 am

    They’re just kicking the can down the road, hoping to inject a steady stream of foreclosures into the market, rather than a deluge at one time. It’s my belief that was the plan all along – look at the failure rate of low-income mortgage programs? You couldn’t see this coming?

    Navy Chief, Navy Pride

  3. Al Lorenz

    June 17, 2010 at 12:39 pm

    The government could help struggling homeowners by letting them suffer the consequences of their actions. As a politicians, the administration could call it an “Education Initiative for Struggling Homeowners.”

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