If all goes as planned, in the future, more struggling homeowners in Florida, and around the country, who are in fear of losing their home to foreclosure, may be able to find some needed relief through the federal Home Affordable Modification Program.
On Friday, the Obama administration announced some plans to help homeowners, including extending the actual HAMP program for another year, and increasing the financial incentives to lenders to grant those modifications.
The goal of the HAMP program is to decrease monthly mortgage payments by lowering interest rates and extending the term of a loan. On average, this tends to save the homeowner around $500 a month.
Over the past several years the HAMP program has come under much scrutiny as many homeowners find the entire process frustrating and difficult to navigate. In fact, many claim that banks tend to lose their documents, and not return phone calls. In response, many lenders are trying to push the blame on homeowners, accusing them of not turning in the proper paperwork.
Over the past two years, 1.7 million homeowners have been able to get a temporary modification. However, sadly, just 900,000 of those owners have actually seen that convert over to a permanent modification. For many, this can just push back the inevitable, and end up with the home still being lost to foreclosure.
Looking to the future, the hope is that more incentives will turn into more people being offered modifications.
Of course, it should be noted that for some who are struggling, a modification may not always be the best course of action to avoiding foreclosure. This is why it's advisable to talk with an attorney who focuses on bankruptcy and modifications to help you decide what the best solution could be.
Source: The Washington Post, "Mortgage modification program will be extended for 1 year, expanded for homeowners with debt," Jan. 27, 2012