It was just announced that the Obama Administration is making some significant changes to the Home Affordable Modification Program (HAMP). I noted 3 key points:

1. Homeowners who are struggling financially will be eligible for a 2nd evaluation with a less stringent debt-to-income ratio.
2. The program will be extended to include investor owned properties that are used as rentals.

And ….(drum roll)…

3. The  Administration will triple incentives for lenders who write down principal balances for underwater homeowners, AND they are extending this principal reduction incentive to Fannie Mae and Freddie Mac!

It’s this last item that has me excited as I’ve been a proponent of principal reduction for a long time, as noted in my blog post back in 2010. What impact all of this will have of course depends on how quickly the new rules can be put into effect and how well all participating lenders adhere to the new guidelines.

All that being said, I’ll take any good loan modification news that we can get!

Advertisements