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The author attended a day-long Residential Mortgage Foreclosure Mediation Training Seminar at the Hillsborough County Bar Association in Tampa, Florida this past week. The most important aspect of Mortgage Modification options that was featured in the Training, is the Federal HAMP or Home Affordable Mortgage Program. Parenthetically, HAMP calculations include the costs associated with Mortgage Insurance.
HAMP requires a "three-month threshold," which is a condition of repayment of HAMP's temporary modification terms, before borrowers will be considered for permanent mortgage modification under HAMP. According to Treasury Department figures reported on Friday, March 13, 2010, some 500,000 -- half a million -- "borrowers" reportedly have passed HAMP's three-month threshold but have not received permanent modifications at this time. Renae Merle, "Borrowers in Foreclosure Prevention Plan Losing Mortgage Aid" (Washington Post Online, Saturday, March 13, 2010).
The Treasury Department also reported this past week that 168,000 "households" have received dispensation from HAMP for permanent mortgage modification. David Streitfeld, "Loan Modification Program Starts to Get Some Traction" p. B2, col. 5 (New York Times Nat'l ed., "Business Day" Section, Saturday, March 13, 2010). There are an additional 90,000 "borrowers" in the pipeline that leads from temporary to permanent mortgage modifications. Renae Merle, "Borrowers in Foreclosure Prevention Plan Losing Mortgage Aid" (Washington Post Online, Saturday, March 13, 2010).
"About 90,000 distressed borrowers have lost their mortgage aid" under HAMP, "and many more are at risk of losing the help," according to the Treasury Department report. Merle, Washington Post Online, supra. Part of the difference in accounting for 90,000 borrowers in the pipeline versus another group of 90,000, apparently, who have already lost their mortgage aid versus a total of 500,000 who passed the three-month threshold required by HAMP, is that many borrowers reportedly are in danger of losing, but have not yet lost, their HAMP modification entirely. Borrowers tend to blame this on delays by Lenders, and Lenders tend to blame Borrowers for not turning in paperwork (which Borrowers tend to note is routinely lost by Lenders even after Borrowers turn in the same documentation three or four or more times). See Merle, Washington Post Online, supra.
The Treasury Department estimates that there are 1,800,000 "potential modifications." David Streitfeld, "Loan Modification Program Starts to Get Some Traction" p. B2, col. 5 (New York Times Nat'l ed., "Business Day" Section, Saturday, March 13, 2010). Other sources quoted in the linked New York Times newspaper article highlight the discrepancy between homeowners with temporary mortgage modifications who are qualified for permanent modifications, compared to those who receive permanent modifications, a discrepancy which reportedly runs as high as 66% qualified and 25% made permanent. Id.
In the Training session I attended this past week it was made clear that much of Residential Mortgage Foreclosure Mediation is about the numbers. These numbers tell a story about the state of HAMP that is already well known to Borrowers and to Lenders. Clearly, these numbers should also be well known by Mediators.
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