Focus on Foreclosure: HAMP Faces a Swift End in the U.S. House Skip to main content

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Focus on Foreclosure: HAMP Faces a Swift End in the U.S. House


In 2010, the President Obama reworked his $75 billion foreclosure prevention plan. The second incarnation of the Home Affordable Modification Program (or HAMP) added new incentives to help those hardest hit by the housing crisis, targeting homeowners who were unemployed or underwater in their mortgages (i.e., folks owing more on their loans than their homes were worth).

Unfortunately, shortly after this revamp of a program meant to stymy the real estate reckoning, data revealed that more than twice as many homeowners were kicked out of HAMP as were granted permanent relief. HAMP was further criticized in the beginnings of 2011 following a sharp drop in the amount of loan modifications that were processed through the program at the end of 2010 and the power shift in Washington following November’s elections, ushering in even more Republican scrutiny of the President’s economic policies.

This might explain why the U.S. House of Representatives voted Tuesday to terminate the Obama administration's signature anti-foreclosure effort altogether.

According The Huffington Post report, “HAMP, as it's known, has been widely criticized for being far off track from its ultimate goal of modifying mortgages for 3 to 4 million struggling homeowners. Republicans repeated the program's latest statistics on the House floor during debate before the vote: Since the program launched in 2009, fewer than 600,000 homeowners are in permanent modifications as of February, while more than 800,000 homeowners have had their modifications canceled. ‘The intent was to help homeowners, but two years after the fact we're left with the cold hard fact that this program has hurt more people than it's helped,’ said Rep. Patrick McHenry (R-N.C.), sponsor of the HAMP Termination Act, which is unlikely to prevail in the Senate and would almost certainly be vetoed by the White House.”

So what do these mixed-messages mean for the millions of Americans seeking mortgage modifications and other homeownership help? That despite federal regulations, creditors hold all of the cards and are therefore savvier than the people they service. Not unlike the CARD Act, which tightened regulations and forced transparency in the credit card industry, HAMP has helped establish better standards for the mortgage industry. Nevertheless, mortgage servicers, unlike their credit card company companions, could choose not to participate in HAMP, leaving many mortgage holders homeless or struggling as banks voluntarily opted out of these programs while at the same time taking shortcuts in the processing of borrowers' loans.

Since federal programs and bank policies aren’t helping, you may be wondering what can? If you’re having trouble making your mortgage, living in a home that will never have equity, and/or residing in an area that is currently devalued, bankruptcy can help get you back on the right side of the proverbial real estate tracks.  A bankruptcy will allow you to surrender your underwater home, negate your personal and financial liability, or make it more manageable to save your home sweet home and still move forward financially.

So, as American homeowners search for more immediate and steady mortgage help, many are instead turning to the simplicity of bankruptcy to stop their impending foreclosure and other creditor actions. If you too have been effected by the housing crisis, knowing a qualified bankruptcy attorney can also help you to conquer your creditors and face your financial fears, yielding the right kinds of support, information and insights—at a low cost— for a viable and secure future beyond whatever is HAMPering your progress. The bankruptcy lawyers at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-888-234-4181, or during the off hours, you can make your own appointment right online at Simply click on the yellow “FREE Consultation Now” button.

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