Latest HAMP details, lenders now ‘required to consider’ IOW, all voluntary and the taxpayer pays – ‘take the load off…and you put the load right on me!’
Update: Here is the press release from Treasury.
Release is at 7:00am EST….2 minute warning…
PS- Q4 GDP 5.6%, can you say double-dip ahead, oh yeah….
Personal income plunges 1.7% nationwide…I know let’s raise taxes! frakkin idjit galoops….
UPDATE: Here we go:
Banks participating in the Home Affordable Modification Program, or HAMP, now will be required to consider (MiM here, Required to consider?? Get the frak outta here!) writing down the principal for borrowers who are eligible for that program and whose mortgage debt is more than 115% of the current value of their homes. The principal would be reduced in stages over three years if the borrowers kept up on their payments.
Lenders are to receive 10 to 21 cents of federal subsidies per dollar of loan principal reduced, depending on the degree to which the borrower is underwater.
Holders of second-lien mortgages that are more than six months delinquent are to receive six cents on the dollar for writing off those loans.
Writing down principal is an additional option for lenders.
All carrot, again, no stick, typical of President UBS:
At the same time, the Federal Housing Administration will offer a new way for some borrowers to refinance into a smaller loan. This program is voluntary and will depend heavily on lenders’ willingness to participate….
Under the FHA plan, lenders would write down the principal of a first mortgage at least 10%. The loans would then be refinanced into FHA-insured mortgages for no more than 97.75% of the home’s current estimated value. To participate, homeowners must be current on their loan, occupy the home as a primary residence, fully document their income and have a credit score strong enough to meet FHA guidelines.
For borrowers with second mortgages, total mortgage debt will have to be written down to a maximum of 115% of the current home value. That will require cooperation from the holder of the second lien, which isn’t assured….
For unemployed homeowners:
The administration also announced a program to provide reduced mortgage payments for three to six months for unemployed borrowers to help them keep their homes while looking for a new job. (MiM here, Uncle Sam has approved 99 Weeks of UE bennies due to the long term nature of the UE wave, hello! We need JOB CREATION!!!!)