The government's Home Affordable Modification Program (HAMP) has helped some homeowners, but the program has fallen far short of its ambitious goals. Although the Obama administration originally said that up to 4 million homeowners would be helped by the program, only about 700,000 households will actually be helped, according to a Congressional Oversight Panel report. That figure is also well below the approximately 13 million foreclosures expected by 2012.
So-so results for homeowners
The report states that "despite the apparent strength of HAMP's economic logic, the program has failed to help the vast majority of homeowners facing foreclosure." It also says that that even though it's too late for the U.S. Treasury Department to revamp its foreclosure strategy, it should do whatever it can to help homeowners get assistance. Among the suggestions is making it easier to apply for a mortgage loan modification, such as with an online application. Also, the Treasury Department should intervene when borrowers have fallen behind on payments for mortgages modified through HAMP.
Talk to your mortgage lender
Despite the problems with the HAMP program, you still may be able to get the help you need with a mortgage. It's important to talk with your lender to discuss your options. Ignoring overdue mortgage bills is not going to solve your problems. Every situation is different, so don't assume that you won't get help with your mortgage payments just because someone you know has been caught up in loan modification limbo. Not all lenders operate the same way, so you may have more success pursuing a modification than other people you know.
Among the options that may be presented to you are temporarily reducing your payments on your existing mortgage. If you have some equity in the home you also may be able to qualify for refinancing. If you are underwater on the loan, your mortgage lender also may be willing to discuss a short sale, which would allow you to sell the home for less than what is owed on the mortgage loan.
Other professional help
Also discuss your situation with a housing counselor. There may be assistance available that you haven't thought about. A counselor also can discuss your rights as a homeowner and help you understand the foreclosure process. Depending upon how serious your situation is you may need to consult with an attorney to discuss the possibility of filing for bankruptcy or going through with a foreclosure. However, the sooner you act when you begin having trouble paying your home loan, the more of a chance you have of avoiding the desperate step of bankruptcy.
There is no quick fix for your mortgage problems, short of coming up with a lump sum of cash to get caught up on monthly payments. If you are applying for a loan modification or some other type of help with a mortgage, it may take months to get the results you want. Be prepared to provide any documentation requested and to stay in communication with the folks working with you to resolve the situation.