The new administration in Washington has no plans to replace a program that expired in December after being in place for the past eight years. The Home Affordable Modification Program was established in 2009 in an effort to help struggling families during the mortgage crisis. Many Florida residents and others across the country whose objective was avoiding home foreclosure through loan modification hoped to participate in the program. However, the program was not as successful as the former administration had hoped.
The program was not mandatory for financial institutions. Even those that did participate were not very positive in their assessments of the effort. Critics claimed that the program did not do enough to help homeowners who were in financial trouble. Since the government is not planning to develop a new plan to address these issues, the responsibility will fall to the private sector.
Financial leaders believe they have learned a great deal from the expired program and are ready to make changes that will benefit both borrowers and lenders. A task force from the financial industry met last year to improve the process for future loan modifications. They plan to focus on payment reduction for the homeowner as opposed to targeting a specific housing debt to income ratio.
Avoiding home foreclosure is a goal of many Florida families struggling financially. Trying to understand the complex issues of a loan modification and other options available to homeowners can be overwhelming. Many in similar situations seek the advice of an experienced attorney to help them through the mortgage modification process.
Source: sfgate.com, “Foreclosure prevention returns to the unknown“, Stacy Cowley, Feb. 4, 2017