Administration Revamps HAMP to Reach More Borrowers
Allowing more principle reductions, more flexible DTI ratios, and allowing modifications of investor homes should have a better impact of the success of HAMP and thus help more borrowers. – Short Sale Innovator
Article By: Carrie Bay
01/27/2012
The Obama administration has announced changes to its flagship foreclosure prevention initiative – the Home Affordable Modification Program (HAMP) – which officials say will expand its reach to more distressed homeowners.
Among the changes, borrowers who are struggling because of debt beyond their mortgage will be eligible for a secondary evaluation with more flexible debt-to-income criteria, and eligibility will be extended to investor-owned homes that are used as rental properties.
The administration is also giving principal reductions a bigger role within the program, tripling incentives for investors that agree to write down an underwater borrower’s principal and offering these same incentives to the nation’s two biggest mortgage investors – Fannie Mae and Freddie Mac.
The deadline for HAMP will be extended for an additional year through December 31, 2013.
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