The Obama Administration is considering prohibiting home foreclosures that haven't been reviewed for assistance under the HAMP program.
According to Bloomberg:
"The proposal, reviewed by lenders last week on a White House conference call, “prohibits referral to foreclosure until borrower is evaluated and found ineligible for HAMP or reasonable contact efforts have failed,” according to a Treasury Department document outlining the plan.
“It is one of the many ideas under consideration in the administration’s ongoing housing stabilization efforts,” Treasury spokeswoman Meg Reilly said in an e-mail. “This proposal has not been approved and there are no immediate planned announcements on the issue.”
Today, foreclosure proceedings can continue even while homeowners try to get HAMP approval. For those that aren't familiar about HAMP, it's a program to help at-risk homeowners refinance their mortgages using government funds. From the HAMP website:
The Home Affordable Refinance Program gives up to 4 to 5 million homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac an opportunity to refinance into more affordable monthly payments. The Home Affordable Modification Program commits $75 billion to keep up to 3 to 4 million Americans in their homes by preventing avoidable foreclosures.
Whether the plan is approved or not it shows just how concerned the government is about the housing market. An improving housing market does not need this type of government intervention.
About 2.82 million U.S. homeowners lost properties to foreclosure last year and 4.5 million filings are expected in 2010, RealtyTrac Inc., an Irvine, California data company, said last month. Foreclosures may reach as high as 7 million mortgages.
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