Thank goodness this charade is starting to be exposed. The federal government's Home Affordable Modification Program, or HAMP, has misled hundreds of thousands of underwater homeowners into continuing to pay for houses they can't afford.
Now, five years later, homeowners are beginning to find out just how "affordable" their indefinite servitude loans are. Read this from Josh Salman's article Higher payments ahead as mortgage program ends in the Sarasota Herald Tribune.
About 500,000 U.S. homeowners will face higher mortgage payments this year under the Home Affordable Modification Program, or HAMP. Because worker wages have generally not improved during the five years that those expiring HAMP loans have been in place, many of those same borrowers are still not in a better position to make payments than they were when they first sought help.
Only about 1 million homeowners successfully received a HAMP modification (just a slight miss from the 7 to 9 million promised), and nearly half of those homeowners are going to experience rate increases this year of 1% on their loans. Meanwhile, the interest rate on a 30 year mortgage is 3.82% according to Bankrate.com.
The HAMP program was a scam from the beginning. Many loans were never written down at all, but were increased by tens or hundreds of thousands of dollars. HAMP turned desperate homeowners into lifelong debt slaves - extending payments for 40 years!
That which cannot be sustained, won't be. Rising interest rates for troubled homeowners will lead to more foreclosures in the next two years. Hopefully this time around, the homeowners and taxpayers won't get fooled into subsidizing broke banks...again. Thankfully, the failure of this program is finally coming to light.