Refinancing Professionals See HAMP Not Halting St Louis Refinancing Foreclosures

By Erina Array

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With the numerous reported failures of the federal plan known as HAMP, inside senior politicians look as if to be jumping on the band wagon displaying their new found pessimistic opinions on where this plan may be headed.

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

But the pressing headlines is that nearly 4 million consumers including St Louis home loan owners that actually need this federal help. Yet, most analysts are despondent at the reality of this lot being achieved.

The reason for this dreary outlook is that less than 200000 or five percent have actually moved forward from the trial program into a permanent modification mode.

But if things couldn't be worse, the inspector general's brief warned that many homeowners are at jeopardy of re-defaulting on their St Louis mortgage loans even after getting help under the federal plan.

Again the critics are coming out of the wood works suggesting that these consumers 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 good to mention the abominable acts of not just the large insurance and banking leviathans but the average person who bought a piece of property they knew they just never afford and did it by taking the only type of loan that could allow them this undeserved asset. Then you have the pure fraudulent actions of those who knowingly lied on their stated income application. Two 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 stating that these loan modifications may not be the preferred program to continue offering. The Treasury department had other sentiments as to the wide spread criticism.

In a long, drawn out comment included in the memo, Herbert Allison, assistant Treasury secretary for financial stability said the plan "should be measured by how many eligible consumers 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 measuring the success."

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

Allison seems to want everyone to comprehend that the important reason is not the failing of HAMP, but that Barofsky is simply not gauging 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 earlier comment.

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

Yet, most people who have been following this plan from its inception were spoon fed the amazing concept 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 reasonable principal reduction, which means in all likelihood, they will continue to fail.

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