There has been much discussion about foreclosure aid programs developed to help struggling homeowners find mortgage debt relief. While some have found success through these programs, others were not so lucky. Additionally, many people simply get overwhelmed by the sleuth of options. One way to maximize your mortgage relief efforts is through education and getting to know more about your options before you step foot into the lender's office.
Home Affordable Modification Program (HAMP)
Started in 2009, this program aimed to open up loan modification options for homeowners. The idea was to relax certain qualification standards in order to allow more people into the program and reduce the number of foreclosures. Despite the goal of reaching 3 million homeowners, less than 1 million have been successfully helped to date. Why? Lenders are playing hardball with modification negotiations and when they do, they are approving in-house modifications outside of the HAMP program.
Home Affordable Refinance Program (HARP)
Also released in 2009, this program was designed to be an alternative for those who would not qualify for a modification under the HAMP. The goal was to provide 4 million homeowners the opportunity to take advantage of low interest rates by refinancing their mortgages. To date, less than 1 million homeowners have been reached. Why? The program contained standards that were too risky for lenders, discouraging them from approving many refinancing applicants.
Home Affordable Foreclosure Alternatives (HAFA)
This program began in 2010 and was focused on helping homeowner pursue foreclosure alternatives, such as short sales and deed in lieu of foreclosure transactions. Only 20,000 homeowners have benefited from this program so far. Why? Lenders prefer to keep short sales and deed in lieu transactions in-house rather than go through this government program, which may reduce their potential for profit.
Emergency Homeowners Loan Program (EHLP)
Announced in 2010, this program was aimed at helping 30,000 or more homeowners who were facing foreclosure due to economic or unforeseen circumstances. The goal was to help alleviate some of the principal amount of mortgage owed or forgive the debt altogether. Less than 12,000 homeowners have been reached through this program. Why? Federal funding issues delayed the launch of the program until 2011 and eligibility requirements are very strict.
Despite many of the shortcomings of each program, many homeowners are still able to find some relief through private lending or other federal programs. Many consumers are working to become more educated about the mortgage debt process and learning how to negotiate better with lenders. Only time will tell if these government efforts proved fruitful in ending the foreclosure crisis and saving the housing market.