72% Rejected by Feds ‘Asset Relief Loan Program’

An alarming number of borrowers are being rejected from a federal mortgage-assistance program that sets out to help make monthly mortgage payments more affordable so owners can remain in their homes, a federal watchdog report shows.

Seventy-two percent of struggling borrowers who apply to the Troubled Asset Relief Program are rejected from mortgage servicers.

“There is a massive lost opportunity for an emergency program designed to help home owners through the crisis if only 20 percent to 30 percent of families seeking help from HAMP actually get into HAMP,” says Christy Romero, special inspector general.

The report says the U.S. Treasury Department’s requirements for mortgage servicers fail to provide a “clear picture of why home owners were denied.”

Source: “72% of Struggling Borrowers Rejected From Federal Mortgage-assistance Program,” MarketWatch (July 29, 2015)

$22B Still Unclaimed in Government Mortgage Relief

Nearly $22 billion remains available to help struggling home owners reduce their monthly mortgage payments and avoid foreclosure through the government’s Making Home Affordable program, according to a quarterly report by the special inspector general for the Troubled Asset Relief Program. TARP has only spent $12.8 billion to date of the $45.6 billion in funds it’s been allocated for housing programs. An additional $3.4 billion is still available for the Hardest Hit Funds Program as well.

The “Treasury should improve coordination between these programs so that they work together as seamlessly as possible to provide effective, sustainable mortgage relief to as many struggling home owners as possible,” the report states.

HAMP has suffered from low participation. Only 1 in 6 home owners who have applied for HAMP have received a permanent loan modification, according to the report. The program has had a high redefaulting rate. To date, 389,222 home owners who have participated in HAMP have not been able to keep up with their new modified mortgage payments. Twenty-nine percent of home owners who qualified for HAMP have had to drop out of the program.

Many home owners are soon set for an increase in their rate. After five years, the rate on HAMP loans rises 1 percent until reaching its previous rate prior to the loan modification.

Source: “$22B in Government Mortgage Relief Still Left for Struggling Homeowners,” Housingwire (July 30, 2014)

“Troubled Asset Relief Program” is Falling Short!

A “hardest hit” fund to help 18 states that were most battered in the mortgage crisis isn’t meeting its goals of helping underwater home owners, according to a report by the Special Inspector General for the Troubled Asset Relief Program (TARP).

Three percent of the $7.6 billion in the Hardest Hit Housing program has been used by the states since Dec. 31, 2011, but most of those funds so far have gone to help the unemployed and not underwater home owners, according to the report.

According to the report, more than 75 percent of the funds have gone toward shoring up states’ unemployment programs, such as by paying the mortgages of unemployed home owners. But the money was supposed to also be used for loan modifications and principal reductions to help underwater home owners as well, the report says.

The 18 states participating in the hardest hit program were selected due to having the highest number of home owners in negative equity and unemployed.

The Treasury department maintains the fund is serving its purpose. The program provides states the ability to “leverage their unique understanding of the conditions in their communities to create effective, locally-tailored programs,” Timothy Massad, assistant secretary for financial stability, wrote in a letter to Romero about the fund.

Source: “Watchdog Blasts Housing Program for ‘Hardest Hit,’” CNNMoney (4/12/12)

Home Mortgage “Scams Rise on Search Engines”

Federal investigators are investigating the Google, Bing, and Yahoo! search engines in a hunt to find con artists who are using the sites to dupe troubled home owners.

The online ads posted by scammers promise to help save home owners from foreclosure. The ads claim they’ll help home owners through a government-backed program by modifying their mortgage payments so they can keep their home. The deceptive ads often target victims when searches for phrases like “stop foreclosure” are made. 

As part of the scam, con artists will ask for “upfront fees” or ask that mortgage payments be sent to them. Hopefully, most folks in the Placerville, El Dorado County regions are aware these practices are illegal in California. If not, contact us for more information.

Investigators have already uncovered 125 mortgage scams through the search engines as of Monday, according to the Office of the Special Inspector General for the Troubled Asset Relief Program. 

Meanwhile, the three search engines say they will no longer accept ads from Internet agencies linked to such scams. 

Source: “Feds Widen Inquiry of Online Mortgage Scams,” The Associated Press (11/22/11)

Not Enough Gov’t Funds Went to Home Owners!

The federal bailout of the U.S. financial system, which was originally forecast to cost as much as $700 billion, is expected to cost far less than expected, according to a newly released congressional report.

The federal bailout, known as the Troubled Asset Relief Program (TARP), was launched by the Bush administration in response to the 2008 financial crisis and was to include aid to struggling home owners. But TARP is expected to now cost taxpayers about $25 billion because it did not accomplish all that envisioned to help home owners avoid foreclosure, a congressional panel said.

The Treasury Department allocated $45.6 billion for three major housing programs to help home owners, including the Home Affordable Modification Program (or HAMP), a refinancing program run by the Federal Housing Administration to aid underwater home owners, and a program designed to help hard-hit areas. But the Treasury Department only spent about $1 billion in TARP money for the foreclosure prevention effort, the panel noted.

Source: “TARP’s Lower Cost Reflects Troubles of Foreclosure Effort,” Dow Jones Business News (March 16, 2011) and “U.S. Senate Panel to Step TARP Oversight-Chairman,” Reuters News (March 17, 2011) 

Unfortunately this, along with restrictions from the Fed’s regarding loans in the Sacramento and Placerville, California regions continue to restrict economic recovery. Other related articles at: www.sierraproperties.com

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