Before HAMP, there was no standard approach among loan servicers or investors about how to help homeowners who wanted to keep making payments, but needed mortgage assistance. By setting standards for what constitutes a sustainable modification across the mortgage industry, HAMP has helped to make private loan modifications more affordable for homeowners. In fact, thanks, in part to HAMP, the proportion of private loan modifications that reduce monthly payments for homeowners has more than doubled. Together, public and private efforts have helped nearly five million Americans get mortgage assistance to prevent avoidable foreclosures. MHA includes comprehensive compliance reviews to ensure servicers fairly evaluate homeowners for assistance and follow program guidelines. Treasury requires participating servicers to take specific actions to improve their servicing processes to more effectively assist struggling homeowners. While more progress needs to be made, servicers are focusing attention on the areas identified through regular compliance and program reviews.
THE HOME AFFORDABLE FORECLOSURE ALTERNATIVES PROGRAM
House owners who are no longer able to make mortgage payments and want to change to affordable homes can access the Home Affordable Foreclosure Alternatives (HAFA) program. HAFA is designed to assist borrowers who cannot retain their home under HAMP or other loan modification programs. While the priority is to keep families in their homes, where this just isn’t possible with a loan modification, they might be able to avoid foreclosure by completing a short sale or a Deed-In-Lieu of Foreclosure (DIL) under HAFA. HAFA works with HAMP by providing a feasible alternative for borrowers to avoid
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