The Obama administration, seeking to help more homeowners lower their interest rates and shed mortgage debt, will relax the rules on a federal loan- modification program and triple its incentives to banks.
The revised Home Affordable Modification Program, or HAMP, also would pay Fannie Mae and Freddie Mac (FMCC) to forgive debt on homes that have lost value. The government-owned companies, citing cost, don’t reduce principal, a policy that has limited HAMP’s reach because they own or guarantee nearly half of U.S. home loans.
Housing and Urban Development Secretary Shaun Donovan, Assistant Treasury Secretary Tim Massad, and White House National Economic Council Director Gene Sperling announced the program changes yesterday in a phone call with reporters.
“This will expand the reach of HAMP,” Massad said.
The HAMP program changes are separate from a new refinancing plan that President Barack Obama promised to deliver in his State of the Union speech on Jan. 24, Sperling said. That effort will be detailed in coming weeks.
It took an election year to do it (not to mention several false starts) but it looks like the President is pushing ahead with refinancing aid to those who need it, and many more homeowners will qualify than the pitiful percentage when HAMP was first announced. The problem remains however that any meaningful amount of homeowner mortgage relief will be completely blocked by the GOP.
One has to wonder if that's the point. If anything is to improve, you'd better make your voice known in November for a Congress not controlled by the Republicans.
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