Extension through December 2015 Will Provide Struggling Homeowners Additional Time to Access Sustainable Mortgage Relief
Like so many of the other homeowner programs (e.g. The Mortgage Debt Forgiveness Relief Act) the HAMP program recently got the green light for an extension. The HAMP extension runs until December 31, 2015. The program was set to expire on December 31, 2013.
The good aspect of the extension is that the extension includes Fannie and Freddie, not just Treasury, and that they set the extension for more than one year.
Despite the fact that banks continue to push away from loan modifications and more toward short sales and deed-in-lieus, homeowners in distress can take some solace in the fact that this opportunity still exists for them to save their home and create a more sustainable situation.
Re-default Rates On Loan Modification Decline
Since its launch in March 2009, about 1.6 people have gone through the loan modification program and nearly 1.3 million homeowners have been helped directly by the program.
Consider that the re-default rate on loan modification looms high.
Some of the loans that never should have been made saw high re-default rates of modifications. Look at the re-default rates for loan mods made in the first quarter of 2009, and those numbers show re-default rates in the range of 85 percent to 90 percent.
However, things continue to improve. Modifications made more recently, such as in early 2011, show improved performance with average re-defaults after 12 months approaching 40 percent to 45 percent.