This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Has HAMP Helped Distressed Homeowners?

Overseen by the Treasury Department and funded by the Troubled Asset Relief Fund, HAMP was launched in 2009 to prove relief to a wide swath of homeowners facing foreclosure in the wake of the housing bust. The program is designed to lower monthly mortgage payments for distressed borrowers by either reducing interest rates, delaying payments, slashing loan balances or using some combination of the three.

The results of a ProPublica questionnaire in the summer of 2010 suggested that many distressed borrowers have had experiences similar to the Ugaros' in attempting to qualify for HAMP. Two-thirds of respondents to the questionnaire who indicated that they were denied HAMP modifications said that they were given "different or conflicting reasons" for why they didn't qualify.





Alys Cohen, a staff attorney at the National Consumer Law Center, said widespread mishandling of applications has plagued HAMP since it's launch in spring 2009. While many HAMP denials are merited, many others are a result of mortgage servicers' mistakes, and those servicers aren't subject to fines for flouting HAMP guidelines, Cohen said.

"Until people can protect themselves directly in real time, servicers are not going to follow the rules," and relief to homeowners will not flow as it should, she said.

Since the Obama administration introduced HAMP -- which had reduced monthly mortgage payments by a median amount of $534.98 as of April 2012 -- only about 1 in 4 applicants have received a permanent modification.

According to the Government Accountability Office, 2.8 million have had their applications deniedor their trial modification canceled. To date, a little more than 1 million have received a permanent modification -- but the program was aiming to have helped 3 to 4 times that.

Despite Rejections, Glimmers of Improvement Despite a record of bungling HAMP applications, servicers still appear to have made strides in implementing the program over the last two years. Ironically, the Ugaros' experience points to some of them.





Anthony Ugaro, who worked at an Army hospital during the Vietnam War, said that he only had to wait eight weeks for written denials to his applications from Wells Fargo. That's a big improvement from ProPublica's finding that homeowners waited an average of 14 months to learn if they'd qualified for HAMP. (Two-thirds of those ultimately rejected said that they never received written denials, according to the ProPublica survey.) A servicer is required to send a rejected borrower a written denial under HAMP program guidelines.

2 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $123.25 -0.80%
FB $83.30 0.35%
GOOG $548.34 -1.23%
TSLA $185.00 -2.84%
YHOO $45.10 1.42%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs