Who is HAMP Helping?

(10 am. – promoted by ek hornbeck)

h/t to Huffington Post

This will be relatively short as my outrage meter seems to be peaking again.

As the next wave of defaults is churning its way through the prime mortgage market our saviors in Washington have come up with a new way to scam the general populace. Its called bailing out the banks, part II.

The administration’s nine-month-old $75 billion program, Making Home Affordable, aims to help three to four million distressed homeowners avoid foreclosure by modifying their mortgages to a more affordable monthly payment. Of the nearly 760,000 modifications that have been enrolled in three-month trial plans, less than 32,000 have transitioned into permanent relief for homeowners. Nearly 87 percent of the modifications under the administration’s program are for investor-owned mortgages.

And here you thought they were trying to keep people in their homes. Wasn’t there something about this program that was just for homeowners? Oh yeah..

What Borrowers Need to Know:

   * To modify a loan through Home Affordable Modification, it must be for your primary residence.

So besides altering that little factoid … here is the big payoff

More than 99 percent of mortgage modifications that include cutting principal are for those mortgages owned outright by a bank, meaning they are held in the bank’s portfolio. Nearly 37 percent of portfolio loans involve cutting principal.

Of course they can’t cut principle for the homeowner but they can for the banks? How is there going to be any credible price discovery for future home buyers?

You may be wondering how that little program is helping the real homeowners so far.

The re-default numbers on all types of loan mods continue to be nasty, with more than half of all modified loans back in arrears (60 or more days delinquent or in foreclosure) after just six months.