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Treasury Updates HAMP Guidelines, Might the Program Work Now?



HAMP considered a failure

obama redIt has been a rocky road for the Obama Administration as their Home Affordability Modification Program (HAMP) comes under fire as the economy continues to sink. HAMP is a $75 billion program designed to lower borrowers’ monthly payments by reducing mortgage rates and extending loan terms.

A year after the launch of HAMP, only 750,000 of the projected 3 to 4 million borrowers have completed the application, and only 7% (65,000) of those signed up have actually completed the program, causing some to call the program a failure, according to the Star Tribune.

HAMP is said to lower borrowers’ credit scores and because paperwork was being lost and delayed for HAMP applicants, the White House sent “swat” teams into mortgage servicing offices to oversee the process, meanwhile Representative Barney Frank opined that the process had him “terribly frustrated” back in December.

Treasury Department “stepping it up”

This month, the Treasury Department (which oversees HAMP) vowed to “step up efforts” with HAMP which presumably begins with the recent announcement that they have issued new guidelines to help the HAMP program become more effective.

These new guidelines mean that at the time of application, borrowers must present three things:

  1. a form requesting a loan modification
  2. authorization for the servicer to get tax information from the IRS (rather than borrowers providing copies themselves)
  3. evidence of current income, such as two recent pay stubs

The Treasury is noting that by not just taking borrowers’ word (that their finances are in order, or that loan servicers will collect the paperwork in a timely manner) is no longer good enough and that the process will not begin until all three items are complete.

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  1. Joe Loomer

    February 3, 2010 at 10:15 am

    “taking borrowers’ word” ROFLMAO ! …..and we arrived at this conclusion HOW? Thanks Lani! I’ll be giggling about this one the rest of the day!

    Navy Chief, Navy Pride

    • Lani Rosales

      February 3, 2010 at 10:55 am

      You caught that, did you? So, it’s not the Treasury Departments’ fault that HAMP is failing, losing paperwork, etc., it’s the BORROWERS’ fault for fudging numbers. I wonder if the Treasury is saying the several hundred thousand who have not gotten help that ARE eligible are not helped by the program because their paystubs aren’t in?

      Another case of “it’s not our fault.”

      Additionally, why would this NOT have been the policy in the first place, it reeks of no-doc-subprimes that weakened the market to begin with!?!?

  2. Mercury213

    February 6, 2010 at 8:31 pm

    Looks like Congress wants some answers from Geithner on why HAMP has failed.

  3. Rick

    February 10, 2010 at 1:16 pm

    As a participant in the HAMP program, I can only give you the “why” I applied for the program, and the likely end result. The reason boils down to unfunded mandates. I own an owner occupied 3 family house, that I bought 6 yrs ago. My mortgage at the time was $1300. Within the first 2 years a federal law was passed which persuaded me to get an equity loan to make my home lead safe, next the variable equity rate jumped, I refinanced. After property re-evaluation in 2007, my taxes went sky high, the mortgage now was $1900. I was now paying the same as my tenants to make the monthly mortgage payment. I dropped my health Ins. to help keep the costs in balance. Then in 2009 FEMA re-mapped the US, and now classified my home as being in a high risk flood zone. As I was challenging FEMA, the mortgage co. forced the flood insurace and increased my monthy payment, now the payment is $2488. At this point I applied for HAMP. Just a few days ago , My mortgage co. notified me that I was denied , and suggested a short sale or deed in liew of foreberance. I reviewed a local real estate internet site, and then found my home is about $90k less than my mortgage balance, not the mere $15K the mortgage company reported my BPO as being. I have documented most of my convervations with the mortgage company, and experienced several imcompetents, and requests for documentation that had been previously acknowledged as in the system , as they were quoted back to me as proof that they indeed were there all a long.

    My gut feeling is the bank was just playing along because the treasury dept had some control over them while they were using taxpayer money, but when the treasury was paid back, the banks had little incentive to take the modifications seriously. Too bad for the bank, if they approved the modification, I would have been providing money to the bank with interest for another 30 yrs, but now they will likey end up with a deed on a house that has $90k negative equity, is 100 yrs, old( lead contaminated-lead safe) and is now in a FEMA hight risk flood zone.

  4. Penny

    September 1, 2010 at 1:19 am

    The program won’t work until the requirements allow the formula to be this:
    (1st mortgage + 2nd mortgage + taxes + insurance + home owners association fees) equal less than or equal to 31% of gross income. As it stands now, only the first, not the first and second are included. People got into financial distress due to interest only 1st mortgages, which have low payments. The problem is the SECOND mortgage… Until this is addressed, very few people qualify for HAMP. And if they don’t qualify for HAMP for the 1st, the 2nd mortgage company will not play ball….

  5. Jerry Brooks

    June 20, 2011 at 3:28 am

    You are absolutely right on this post. We did qualify for the HAMP on our first loan. We also applied for a HAMP on the second at the same time, that was 6 months ago, and the second states they cannot approve the HAMP / CHAMP until the state sends them a letter stating that our HAMP was approved for the 1ST.

    On the 13th of June we received a letter from the 2ND that they are going to start forclosure proceedings in 32 days unless we get paid current. Yes, we even had a Chapter 7 Bankruptcy and the 1ST is upside down, they want to take our home?

    Can anyone tell me exactly who we can contact to get assistance with this matter? The 2ND is not "playing ball" with the HAMP, and yes, they received TARP money.


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Economic News

Boomers retirement may be the true reason behind the labor shortage

(ECONOMY) Millennials and Gen Z were quick to be blamed for the labor shortage, citing lazy work ethic- the cause could actually be Boomers retirement.



Older man pictured in cafe with laptop nearby representing boomers retirement discrimination.

In July, we reported on the Great Resignation. With record numbers of resignations, there’s a huge labor shortage in the United States. Although there were many speculations about the reasons why, from “lazy” millennials to the number of deaths from Covid. Just recently, CNN reported that in November another 3.6 million Americans left the labor force. It’s been suggested that the younger generations don’t want to work but retiring Boomers might be the bigger culprit.

Why Boomers are leaving the labor force

CNN Business reports that 90% of the Americans who left the workplace were over 55 years old. It’s now being suggested that many of the people who have left the labor force since the beginning of the pandemic were older Americans, not Millennials or Gen Z, as we originally thought. Here are the reasons why:

  • Boomers are more concerned about catching COVID-19 than their younger counterparts, so they aren’t returning to work. Boomers are less willing to risk their health.
  • The robust real estate market has benefitted Boomers, who have more equity in their homes. Boomers have more options on the table than just returning to work.
  • Employers aren’t creating or posting jobs that lure people out of retirement or those near retirement age.

As Boomers retire, how does this impact the overall labor economy?

According to CNN Business, there are signs that the labor shortage is abating. Employers are starting to see record number of applicants to most posted jobs. FedEx, for example, just got 111,000 applications in one week, the highest it has ever recorded. The U.S. Bureau of Labor Statistics projects that the pandemic-induced increase in retirement is only temporary. People who retired due to the risk of the pandemic will return to work as new strategies emerge to reduce the risk to their health. With new varients popping up, we will have to keep an eye on how the trend ultimately plays out.

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?



NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<


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Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.



young executives

job openings

Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.


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