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?

The Treasury Department's most recent Making Home Affordable Program Performance report, released monthly, showed that servicers have, indeed, made progress in using HAMP, particularly in the area of income calculation.

For example, the Treasury found that more than 1 in 4 calculations of a borrower's income performed by Wells Fargo when evaluating HAMP applications was at least 5% off the mark in the first quarter of 2011. Now, just 1 in 50 are off by that much.

Wrongly Denied?

Could the Ugaros have been mistakenly denied a HAMP modification? That's unclear. But the couple does appear to meet all the main eligibility requirements of HAMP.

Their home is their primary residence, their mortgage was originated before 2009 and they owe less than $729,750 on their mortgage. (They owe about $230,000.) Anthony's layoff and heart disease diagnosis also qualifies as a hardship.





They seem to qualify for a HAMP modification financially, too. The Treasury's latest performance report said that the average household's median mortgage payment before receiving a permanent modification equaled 45.4% of the household's monthly income. When they applied, the Ugaros' $2,400 monthly mortgage payment was between 50 and 60% of their $4,300 monthly household income.

If anything, the Ugaros would appear to have not been making enough money to qualify, but they were told the opposite for their second denial -- that they made too much. That makes Wells Fargo's decision on their applications difficult to digest for the couple.

A Wells Fargo representative told AOL Real Estate that the Ugaros' income was, in fact, not a factor in denying them a modification, but didn't offer further explanation.

"We are attempting to reach the Ugaros to discuss their current situation and will try to work with them on potential options for assistance," said Vickee J. Adams, vice president of external communications at Wells Fargo.

Calculated income is just one factor included in a "net present value test," which can make or break a modification for HAMP applicants. The test evaluates whether or not a mortgage's investor -- which often is not actually the mortgage's servicer -- is likely to make more money through a loan modification. (Mortgage investors can include hedge funds, institutions, pension funds and mutual funds, among other entities.)

3 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!
DOW 16,399.67 +19.26 0.12%
S&P 500 1,904.01 +17.25 0.91%
NASDAQ 4,316.0740 +57.6360 1.35%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

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