Feds extend mortgage modification program two more years
NWREporter July 2013
Distressed homeowners will have two more years to get mortgage modifications and avoid foreclosure under an extension of a mortgage-modification program President Obama introduced in early 2009.
Officials from the U.S. Department of the Treasury and the U.S. Department of Housing and Urban Development (HUD) announced an extension of the Administration's Making Home Affordable Program on May 30. The program, which was set to lapse at year end, is extended through Dec. 31, 2015.
The Making Home Affordable Program provides relief and protections for families at risk of foreclosure while helping the housing market recover from a historic crisis. Since its launch, about 1.6 million actions have been taken through the program to provide relief to homeowners and nearly 1.3 million homeowners have been helped directly by the program.
The two-year extension was coordinated with the Federal Housing Finance Agency (FHFA) so deadlines on various relief initiatives are aligned. These other programs include the Home Affordable Refinance Program (HARP) and the Streamlined Modification Initiative for homeowners with loans owned or guaranteed by Fannie Mae and Freddie Mac.
"The housing market is gaining steam, but many homeowners are still struggling," said Treasury Secretary Jacob J. Lew. "Helping responsible homeowners avoid foreclosure is part of our wide-ranging efforts to strengthen the middle class, and Making Home Affordable offers homeowners some of the deepest and most dependable assistance available to prevent foreclosure. Extending the program for two years will benefit many additional families while maintaining clear standards and accountability for an important part of the mortgage industry."
Along with protections for homeowners, MHAP aims to create standards for the mortgage servicing industry. The benchmarks include requirements for mortgage servicers regarding clear and timely communications with homeowners and protections to ensure that homeowners are evaluated for assistance before being referred to foreclosure.
Through March 2013, more than 1.1 million homeowners have received a permanent modification of their mortgage through HAMP, with a median savings of $546 every month - or 38 percent of their previous payment. Data from the Office of the Comptroller of the Currency (OCC) shows that the median savings for homeowners in HAMP is higher than the median savings for homeowners in private industry modifications, which has helped homeowners in HAMP sustain their mortgage payments at higher rates. Government reports show HAMP modifications exhibit lower delinquency and re-default rates than industry modifications.
"The Making Home Affordable Program has provided help and hope to America's homeowners," said HUD Secretary Shaun Donovan. "Families across the country have used its tools to reduce their principal, modify their mortgages, fight off foreclosure and stay in their homes - helping further stimulate our housing market recovery. And with this extension, we ensure that the program keeps supporting communities for years to come."
Homeowners can visit MakingHomeAffordable.gov for more information about free resources or call 1-888-995-HOPE (4673). There is no fee to apply for assistance.