HAMP

Like a few other Obama policies, the Home Affordable Modification Program has been criticized for falling short of its goals. When it was passed last year, the so-called HAMP was intended to reduce monthly mortgage payments for cash-strapped homeowners so that they could afford to keep their homes.  But critics have charged that it is only delaying the inevitable, with many homeowners likely to be in default again within a couple of years.

But Treasury Assistant Secretary Michael Barr points out that the program has had “quite a strong stabilizing influence” on the housing market by reducing the number of foreclosures currently on the market and preventing more downward pressure on prices.  In addition to giving troubled homeowners a reprieve, HAMP also has created a backlog of cases as banks carefully screen borrowers to see if they qualify for a modification.

The result is fewer foreclosed homes on the market. Home foreclosure postings in Dallas County, excluding repeat filings, dropped 12 percent last year. Nationally, foreclosures are also down.  Proponents are hopeful that the housing market will be better able to handle foreclosures in a year or two when both the job market and the economy have recovered. And that would make HAMP a qualified success.