Mortgage Professionals See HAMP Not Stopping St Louis Refinancing Foreclosures

With the numerous reported failures of the federal program known as HAMP, inside senior legislators look as if to be jumping on the band wagon showing their new found pessimistic viewpoints on where this system may be headed.

There were letters recently exchanged between one key senator and Neil Barofsky, special inspector general for the Troubled Assets Relief Program (TARP), on the matter of HAMP with Barofsky discussing that over one-and-a-half million or so mortgage owners would get any type of mortgage assistance.

But the worrying news is that nearly 4 million consumers including St Louis home loan owners that actually need this federal assistance. Yet, most experts are despondent at the reality of this lot being accomplished.

The reason for this bleak outlook is that just under 200000 or five percent have actually advanced from the trial program into a permanent modification mode.

But if matters couldn't be worse, the inspector general's release warned that many homeowners are at danger of re-defaulting on their St Louis mortgage loans even after receiving help under the federal system.

Again the critics are coming out of the wood works suggesting that these homeowners are irresponsible. But the truth of the matter is, many still owe more money than what their home is worth not mentioning that others have second mortgages.

Without digressing to a great degree, I think its fair to mention the abominable acts of not just the huge insurance and banking leviathans but the average person who bought a piece of property they knew they just were not able to afford and did it by taking the only type of loan that could give them this undeserved asset. Then you have the pure fraudulent exploits of those who knowingly lied on their stated income application. Years later, these acts have come to be known as "liar loans."

Getting back to the matter at hand, Barofsky then shows his further skepticism basically saying that these loan modifications may not be the right program to continue offering. The Treasury department had other sentiments as to the wide spread criticism.

In a long, drawn out reply included in the report, Herbert Allison, assistant Treasury secretary for financial stability said the system "should be measured by how many eligible homeowners are able to avoid the pain and stigma of foreclosure by reducing their mortgage payments to affordable levels while either remaining in their homes or transitioning with dignity to more suitable housing. The number of permanent modifications is one element, but not the only element of gauging the success."

Whether this federal program meets its overall success or failure is second only to the fact that these primary officials want us to view their fundamental beliefs from their viewpoint and no other.

Allison seems to want everyone to understand that the important significance is not the failing of HAMP, but that Barofsky is simply not measuring its lack of success in the correct manner.

Since Allison clearly points out that permanent modifications are really only one way to help struggling homeowners, this somehow suggests that he himself doesn't firmly believe his previous comment.

We cannot ignore the fact that these services are also offering numerous foreclosure prevention initiatives such as short sales as realistic choices. It is sad that many of these consumers both nationally and locally can no longer qualify for any type of St Louis refinancing options.

Yet, most people who have been following this system from its inception were spoon fed the amazing idea that permanent loan modifications through HAMP was the best and perhaps the only way the country would see this insurmountable amount of foreclosures go away.

And as we are finding out, many of these modifications did not include a realistic principal reduction, which means in all likelihood, they will continue to fail.

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