Strategic Defaulters Rejoice-HAMP'S Been Humped!

They can't get it done!

Yesterday my accountant told me how effective he has been helping folks get their mortagages mitigated. That is, having the bank reduce the principle amount they owe thus reducing thier monthly payment to something they can afford and eliminating the need and cost for the bank to foreclose.

The government has a program they call HAMP-Home Affordable Mortgage Program-to payoff the banks for the loss they will take in doing a loan modification.

But our government is broke, so they needed to find a way to delay paying the HAMP money. Easy. Evaluate the lenders and then claim they are not performing good enough. Classify them as needing “substantial” improvement and then withold payment of the bailout money.

Nothing more disappointing to Banks doing HAMP deals based on the government giving them bailout money, and then finding out the government won't pay! Common sense says you better stop doing these HAMP deals until you start getting the money you were promised.

Read the article. If you are in Strategic Default you will be delighted to learn which banks are taking forever to foreclose.

If you try to get the taxpayer to pick up the loss the bank will take if they foreclose on your house by using the HAMP bailout money, then you probably lose. These loans will dry up.

Sort of forces delinquent borrowers to not pay anything to their lenders and do a strategic default; rather than try to get a double-crossed bank to modify their loan via HAMP, don't cha think?

Here is the article where I got the poop on the government defaulting on its obligation to the banks:

Treasury Puts Performance of 10 Largest HAMP Servicers on Display
06/09/2011 BY: CARRIE BAY DSNews.com

The U.S. Treasury has released its regular monthly report card on the Home Affordable Modification Program (HAMP). New this time is an assessment of how the 10 largest HAMP servicers are performing.

Four servicers have been designated as needing “substantial” improvement: Bank of America, JPMorgan Chase, Ocwen Loan Servicing, and Wells Fargo.
For three of these – BofA, JPMorgan, and Wells – Treasury is withholding all future financial incentives until they make specific improvements. Should they fail to correct identified problems in a “reasonable time,” Treasury says it may permanently reduce their financial incentives. As problems are remedied, incentive payments will resume.
Treasury will not withhold servicer incentives owed to Ocwen because officials say Ocwen’s compliance results were “substantially and negatively affected” by its acquisition of HomEq Servicing just before the compliance testing period, which covered part of the fourth quarter of last year and the first quarter of this year.
“Treasury will withhold servicer incentives from Ocwen if future compliance results do not indicate improvements,” according to the department’s report.
The remaining six of the largest servicers have been tagged as needing “moderate” improvement: American Home Mortgage Servicing, CitiMortgage, GMAC Mortgage, Litton Loan Servicing, OneWest, and Select Portfolio Servicing.
These firms could have incentives withheld in the future if they fail to make certain improvements, Treasury explained.
All withholdings apply only to incentives owed to servicers for their participation in the federal program. Incentives slated to go to homeowners or investors will still be paid through the servicer.
No servicer has been identified as needing only “minor” improvement.
According to Treasury’s report, there are currently 608,000 permanent HAMP modifications in active status.
Servicers converted 29,000 trial mods to permanent during the month of April and started another 29,000 trial plans during the month.
Treasury notes that of trial modifications started since June 2010, the average length of the trial period has been 3.5 months and 70 percent of those have been converted to permanent modifications.
The median payment reduction among permanent mods is 37 percent, or more than $500 a month, and Tim Massad, assistant Treasury secretary, says re-defaults have been “lower than anyone expected.”
Treasury says it plans to issue program assessments of the top 10 servicers on a quarterly basis.


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