Happy (almost) Hallowe’en, my Rebellious Readership!
It’s getting awfully alphabet-soupy out there in the banking world right now. So I thought I’d devote a few serious (relatively) lines to a brief overview of the various programs and what-not which are currently part of the home foreclosure universe.
Ready? Here we go...
TARP: How about we begin at the beginning with the Troubled Assets Relief Program. This was the originally big bail out fund, where banks were supposed to sell their “toxic” assets to you and me (er…the government, with our tax dollars) for a chunk of money, then use that additional money to start lending again. Whether this is working or not is debatable. Really, really debatable.
HASP: The Homeowner Stability and Stability Plan: The first formalized effort of the Obama Administration, aimed at getting homeowner’s payments reduced, with the government guaranteeing some of the risk to banks, ultimately leading to…
HARP: the Home Affordable Refinance Program, within fairly strict guidelines, Freddie/Fannie Mac mortgages can be recast based on the current market value of their home. But if your loan is NOT part of Freddie/Fanny, then you can avail yourself of…
HAMP: Home Affordable Modification Program. Designed for mortgage holders with loans from OTHER than Fannie/Freddie Mac and who are more than 31 days in default, this program was launched this past spring. This program requires banks to re-work mortgage payments based on homeowners current income, and does not require the banks to reduce the capital of the mortgage, but loans are amortized at lower interest rates and can extend for up to 40 years.
CLEAR AS MUD, Right? It boils down to one thing-there are lots of programs out there that banks are able and supposed to be using to modify the mortgages of homeowners who are in default. But, as I’ve mentioned elsewhere, the number of mortgages actually being re-worked is dismally low.
I’d like to hear from you, the Rebellious Reader, about any experiences you’ve had navigating the loan-modification jungle. Drop me a note, visit me on Facebook, or post your comment here.
Alphabetically Yours,
Larry
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