Attempts at Relief and Reform

HAMP

Posted on Saturday, August 21, 2010

Of 1.3 million trills only 422k permanent mods have been made. Wonder what the actual cost per mod when you factor in what the govt and banks have spent that turns out to be. Betting you could've paid off those loans in full and had money left to spare instead. July was the lowest month in recent time with only 17 trials. In comparison 5 times as many mods cancelled in July

The good news is HAMP at least slowed down a lot of inventory from being dumped on the market via foreclosure. An estimated 7 million homes. The bad news is a lot ofmthose unit willmeventually make their way into thebmarket anyway. The question is always are we better off slowing the problem and handling it in bit size pieces or letting it crash quickly and putting it behind us faster too.

Another good note is HAMP seems to have helped establish a model for banks to do their own mods that are more sustainable. Until now a bank mod meant they give you time to pay back every penny you owed. Now it means they take part ofmthe hit too with lower interest etc in order to provide a modnthats more likely to succeed. About half of the foksnwhomdont succeed in a HAMP mod are getting a bank mod that may work instead. Not sure what that means to the future American psyche when you cano sit at a closing table and think "if I can't end up paying this mortgage the bank will help me out". That's bound to increase borrowing costs for everyone


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