How many loan modification programs do we need?

HAMP, NON-HAMP, HAFA, ALTERNATIVE MODIFICATION (Alt Mod), Second Lien Modification (2MP)

Is it just me or does it seem like everyday there is another program introduced to help homeowners stay in their homes? Or should I say prolong the inevitable?

The latest introduction from Fannie Mae is the "Alt Mod" which is implemented when HAMP fails. Where does this fall in the scheme of things? What happened to the HAFA program that was the last resort before foreclosure? It appears that this is just another step that was stuck between HAMP and HAFA. Doesn't really matter because principal write-downs or principal forgiveness is prohibited on Fannie Mae loans which is the biggest obstacle we face in this market.

Now that Wells Fargo has signed on for 2MP, it is getting a little attention although it was implemented a year ago. Makes me wonder how many other programs were introduced that the lenders never used. It looks like HOPE NOW may be the most successful program so far, but they have not taken on the next wave of defaults on the horizon.

I'm thinking that instead of another modification program that the financial institutions come up with a smarter, more streamlined process. The programs that are using portals are having the most success; BOA with Equator and the HOPE LoanPort. I am looking forward to the time (this year?) when we can just upload our loan documents into a portal for short sales or loan mods and make everyone's life easier and get this market back on track. Would love to hear your comments.

I have been following this for some time now and I think HAFA is going to be the way the banks bring the property to market, slowly I expect that as we get into the summer months we will see HAFA and the way it is going to be applied come into effect. I took a listing today for a short sale. The bank is going to lose 300K in equity and another 40 grand in payments. But the loss will even be greater if they do not short sale.

The bank had sent a letter out that was truly the Barking dog...it said you better pay or we will come after you. The letter also said that the client had been denied HAMP loan Mod because they had equity and then offered them a short sale. What is the bank thinking? That is like a police officer saying FREEZE put your HANDS UP... and you say to the cop which do I do Freeze or put my hands up.

They threatened to send our a letter to accelerate... in California that means nothing and does not start the NOD process. They are just doing all they can to inspire payment.

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Comments

George Kenner March 20, 2010 at 2:23pm

I have been following this for some time now and I think HAFA is going to be the way the banks bring the property to market, slowly I expect that as we get into the summer months we will see HAFA and the way it is going to be applied come into effect. I took a listing today for a short sale. The bank is going to lose 300K in equity and another 40 grand in payments. But the loss will even be greater if they do not short sale.

The bank had sent a letter out that was truly the Barking dog...it said you better pay or we will come after you. The letter also said that the client had been denied HAMP loan Mod because they had equity and then offered them a short sale. What is the bank thinking? That is like a police officer saying FREEZE put your HANDS UP... and you say to the cop which do I do Freeze or put my hands up.

They threatened to send our a letter to accelerate... in California that means nothing and does not start the NOD process. They are just doing all they can to inspire payment.
Steve Adkins March 20, 2010 at 8:53am

My opinion is that the White House and Congress are using these worthless programs as a stall tactic until they can really figure out how to fix the job market (after all their time is spent on wrecking health care, but that's a whole different story).

Two years ago, the battle cry from congress was Fix Housing and you will Fix the Economy. But they are only now realizing that you cannot fix the housing market until people have jobs and can pay their mortgage! Expect to see additional sub-standard housing programs before we see an improving job market.

They have only delayed or softened the crash of the housing market, but values are still dropping on average. And with a growing "shadow" inventory that has to eventually come on the market, values will stay depressed in the fear of a massive dump of these properties.

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