In a report released today, a congressional oversight committee concluded that the attempts to keep people in their homes is having little effect. The report from the Congressional Oversight Panel, created by Congress to monitor bailout spending, came as the Treasury prepared to release Wednesday its latest monthly report on the $50 billion Home Affordable Modification Program, or HAMP. That report will show that so far more than 230,000 households had been given permanent reductions in loan payments by the end of March, a Treasury spokeswoman said. That is up from 168,703 a month earlier.
By comparison, nearly eight million households are behind on mortgage payments or already in the foreclosure process.
HAMP loan modifications typically leave borrowers still heavily burdened by debts from second mortgages, car loans and credit cards, the panel noted. The typical household with a HAMP modification still must devote 59% of total income to debt service. "Most borrowers who proceed through HAMP will face a precarious future," the report said, adding that "many borrowers will eventually redefault and face foreclosure."
Even if you can get a modification, that doesn't mean that other options are not a better alternatives, such as bankruptcy, short sale, or a deed in lieu of foreclosure.
For a link to the full report of the panel, click here:
Congressional Oversight Panel: Evaluating Progress of TARP Foreclosure Mitigation Programs