December 11, 2016


By Timothy Stull (

The Federal Government mortgage relief programs, like many administration funded programs, is set to close out on 12.31.16.  The most notable relief program in that group is the HOME AFFORDABLE MODIFICATION PROGRAM, otherwise known as HAMP.  The HAMP program, which was launched in 2009, for the most part has been a colossal failure.  Though it has been touted as the engine that has saved homes from foreclosure, the costs incurred to remedy each foreclosure case have been incredible.  The cost of HAMP to each independent taxpayer has been estimated at over $84,000…..and we will be paying that back for many years to come.  A program that was designed to save over 9 million homes in 4 years, has saved a little less than 2 million homes in 8 years.  Keep in mind also that the number HAMP modifications that end up back in default circles right around 50%.  So why didn’t the program work?  Two major issues….first, the HAMP program really has no “teeth” to it.  The banks were advised to cooperate voluntarily and failed to do so.  Since they were given their bailout all up front, there was no financial incentive to cooperate at all.  This is the equivalent of me giving my 5 year old son his allowance up front and then expecting him to do his chores…everyone should get the picture here.   Second, home owners were supposed to receive strong guidance from nonprofit agencies through the process.  This never happened since the nonprofit agencies were overloaded and the workers were underpaid…..most of the clerks / advisors working on cases had very little mortgage or finance experience as well.    There was also no direct incentive for the nonprofit agencies to complete solid deals for the home owners, since they were paid by the Federal Government for simply “submitting” loan modification packages.  NACA and other non profit agencies held rock concert like events to pile in HAMP applications…..even worse, the banks funded the events as well, just to make sure they kept control….sounds like a colluded three ring circus to me!  All in all, this  led to the completion of weak deals, no deal or foreclosure.   So what now?  We are certainly heading into much more aggressive territory in 2017.  Both the banks and the non-bank servicers are foreclosing quicker due to the rising tide in home equity.  We are no longer in a distressed market and they have nothing to lose.  There are certain lines of defense that can be used, but they are much more complex to execute upon than in the past.  Due to the recent shift in the political tide, we are headed back into a capitalist market…which means every man for himself…..the Federal Government is going to stay a million miles away the foreclosure mayhem.  Unless you understand the “game” 150% and have a gladiator mentality, you will need help working through the foreclosure prevention process.  The CFPB has tried to step in and add a layer of protection, however it appears that there are no clear defined rules, which will lead to open arguments throughout the modification process ~  Utilization of the new CFPB mortgage servicing rules, the Nation Mortgage Settlement and independent state laws will be key moving forward.  Stripping down the validity of the debt and applying aggressive foreclosure defense will be crucial as well.  Ultimately, more home owners will need to be prepared come in with down payments to get any proprietary modification done as well.  The “outside the box” process is the way modification deals were completed prior to 2008……and we are heading back into that territory.  Banks, loan servicers and non-bank servicers do not want to complete loan modification deals…regardless of what government propaganda has been disclosed in the past.  There is no “yellow brick road” to follow or “magic carpet ride” waiting…..every case moving forward will be hard fought trench warfare.    Our firm is used to the “trench warfare”,  has the experience, utilizes proven proprietary techniques and know what it takes to win.  We offer a free consultation and  no nonsense approach to success.  Feel free to call us at 877.297.7011.


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