New Math Equation: HAMP + HARP + TARP = DUD

I recently read this great article on It took a look at the Making Home Affordable programs and how they were intended to help millions of struggling homeowners. The only thing it appears it has done is spend hundreds of billions of tax payers money and frustrate thousands of people. What are your thoughts on the Making Home Affordable Program? Has it helped you?

It seems all that these programs are doing is spending money and delaying the inevitable…a giant wave of foreclosures.

Earlier this year, the Making Home Affordable program was unveiled to help 3.2 million struggling homeowners stay in their homes either through a loan modification or a refinance. Program names with easy-to-remember acronyms were created:

* HAMP — Home Affordable Modification Program. This is for people who are having a tough time paying their mortgage, perhaps because their interest rate has increased or they have less income.

* HARP — Home Affordable Refinance Program
. This is for people who pay their mortgages on time but are not able to refinance through conventional means and therefore, cannot take advantage of today’s lower mortgage rates perhaps due to a decrease in the value of their home.

To help support HAMP and HARP, TARP was created. The Troubled Asset Relief Program, or TARP, is a huge $700 billion bailout plan in which Congress infuses banks with hundreds of millions of dollars with the idea that banks will use these funds to do HAMP and HARP loans. Sounds easy enough.

So, what’s the problem?

Simply, it’s not working.  This week, government officials reported to the House Financial Services Committee that 70 percent of borrowers who have signed up are not getting help. Reasons?

* J.P. Morgan Chase says 29 percent of borrowers it signed up for the program did not make their new, cheaper mortgage payments.
* Bank of America said that about 65,000 of the borrowers it has helped made initial payments as required, but 50,000 of them have either not submitted all of the required paperwork or show some discrepancy in the information — putting them at risk of losing the aid.

So, it sounds like borrowers are not getting their act together, right? Wrong, according to Richard H. Neiman, New York’s top bank regulator and a member of the Congressional Oversight Panel, who said:

“We have anecdotal evidence that consumers continue to face major issues with servicers such as JPMorgan Chase and Bank of America losing their documentation or not clearly explaining the modification process to begin with.”

Or, perhaps there’s some other reason lenders won’t modify your loan.

What’s next?

Some ideas tossed about include:

* Offering a program similar to one in Pennsylvania in which unemployed workers are given low-interest loans to pay their mortgages. Eligible borrowers can get loans up to $60,000 that can be repaid over an extended period with payments as low as $25 a month.
* Continue working to get borrowers out of trial modifications and into permanent modifications.
* Streamline the documentation process and create an online portal for tracking and submitting documents.
* Pass a mortgage “cram-down” bill that stalled in Congress earlier this year which would let federal judges lengthen mortgage terms, cut interest rates and reduce loan balances for homeowners in bankruptcy court, even if the lender objects. (Or, get really crazy and do something like this judge did in Long Island).

Unfortunately, time is ticking and these ideas cannot be implemented quickly enough to keep up with the looming deadlines for these trial modifications, the increasing unemployment rate and rise in foreclosures.

If you are a troubled landowner, or have a family member or friend facing foreclosure, please give us a call for a confidential consultation about the possibility of a short sale.  Call Craig Baranowski at 850.259.1788 or email  us @ Team Baranowski has a 100% success rate for all of our short sales for 2009!

This site, Craig Baranowski or Keller Williams Realty is not providing legal or tax advice. The information provided is for educational and informational purposes only. It is recommended that sellers considering a short sale should consult an independent legal and tax adviser for more information.


  1. John Wright says

    Tom I totally know what you mean…lol I had the same experience and I remember hanging up and telling someone "they have a bunch of gum smacking teenagers answering these calls." Like you said, it was insult to injury really. I was speaking to one of the reps one time and she said "You know we do not really work for BofA right?" She explained that they are contracted and that the calls get routed to them. In other words my friend, we have been speaking to a contracted answering service.
    Tom I like your posting. It is so important that we stand together as one voice on this. It is the only way that BofA is going to listen. Please cut and your posting and send it to the BofA CEO with "I SUPPORT THE WRIGHT VS. BANK OF AMERICA LAWSUIT." I have heard from the attorneys that the CEO is getting them. He starting to see that we are uniting as one. Please help me and other send this message to BofA and it's CEO
    His email is:

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