Archive for the ‘Strategic Default’ Category

The End of an Era: Home Affordable Modification Program (HAMP) Ends

As of December 31st, 2016 the US Trasury’s Making Home Affordable Program or HAMP as most people call it will officially come to an end after seven fairly successful years. Born out of the Great Recession, the US Treasury unveiled this program to not only make save homes from foreclosure but to also prevent some houses from entering foreclosure altogether. HARP or Home Affordable Refinance Program, which helps homeowners to refinance their mortgages to a lower interest rate, was extended until September 30, 2017.

The main benefit to a Loan Modification under HAMP was that the Mortgage Servicers and Investors recieved an incentive from the Government for helping borrowers stay in their homes. In many instances, a HAMP modification was able to help borrowers who were struggling financially, mainly because of these incentive payments. It was estimated that in 2016 50% of all loan mods were under the HAMP program.

What Are My Options Now?

Well, there has always been what is called an “In House Loan Modification Program” or a “Proprietary Modification Program” which was essentially a set of criteria and modification underwriting standards that are set in place by specific mortgage investors, such as Fannie Mae and Freddie Mac. Not all Government Sponsored Enterprises (GSE’s) have in house Loan Modification Programs, it mainly varies from investor to investor, but there are a fair amount of private investors who do offer such programs. For the most part, a mortgage investor would rather keep a borrower in their home and earn interest from them, than take the house back in foreclosure and hope to sell it for a fair price. It’s a much safer proposition for a lender, but only if you have income and they deem you qualified to make monthly payments.

How Does This Affect My Mortgage?

If you are behind on your mortgage, this actually may affect you substantially. The lapse of HAMP essentially removed any governmental incentive servicers and investors were getting for modifying loans, which should theoretically make it harder to get a modification. But as I have noted above there should still be In House programs under which you can apply. This article also seems to suggest that there may even be a lack of consistency in the modification programs throughout the industry. I.E. Wells Fargo may seek to modify your mortgage to 31% of your income and Chase could do 28%, but these are just guesses. Also, it appears that the timeline for modifications will be sped up, since homeowners will no longer be considered for the HAMP program. This may increase the effectiveness of modifications, since in my experience one of the greatest determining factors is the length of the modification process and the arrears accrued at the end of the process.

It yet remains to be seen how the housing market will react to this change, and whether the lapse of the HAMP program will bring a new wave of foreclosures in Cook County and around Chicago. If you or someone you know if facing foreclosure or has missed a mortgage payment call Steven Grace at 312-493-6912 for a free phone foreclosure consultation.

Cook County Foreclosure Rate Slows

Cook County Foreclosure Sale Rate Lower by 75%

Although Foreclosure rates in Cook County and the surrounding counties has decreased I have recently seen a few cases that have been in the courts for years hoping for a conclusion. Many times, the homeowner has been struggling with the bank to work out a modification and may have even gone through a Chapter 13 or even a Chapter 7 bankruptcy already in hopes of saving the home. I have even in cases of high mortgage balances, seen Chapter 11 bankruptcies to save a home.

To complicate the foreclosure picture further, many people are now facing increases on their Making Home Affordable (HAMP) Loan modification interest rates which increases the monthly payment amount. For many people even a small increase could mean losing a home. The question as to whether the foreclosure rate will remain low remains to be seen.

Furthermore, real estate values haven’t rebounded in many areas. The affluent neighborhoods have seen increases, but there are many areas around Chicago that have built zero equity since the Great Recession. As a result, many homeowners are still making the decision to stop paying their mortgage payment or to make a strategic default on their mortgage. Dealing with a losing investment such as an underwater home could potentially be the best decision of your life. There are substantial legal risks associated with such a default and you need a competent legal advisor to guide you through.

Chicago Strategic Default, Loan Modification and Foreclosure Defense Attorney

If you would like to speak further about your issues affecting you and you mortgage call The Law Offices of Steven J Grace at (312) 493-6912 today for a free 15 minute phone consultation.

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At The Law Offices of Steven J. Grace, based in Chicago, Illinois, we represent clients throughout Chicagoland, including the cities of Deerfield, Jefferson Park, Lisle, Northbrook, Oak Brook, Park Ridge, Schaumburg, St. Charles and Warrenville; and other communities in Cook County, Dupage County, Will County, Grundy County, Kendall County, Kane County, LaSalle County and Lake County.