Mortgage Analysts Notice HAMP Not Halting St Louis Refinancing Foreclosures

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With the large amount of reported failures of the federal plan known as HAMP, inside senior officials seem to be jumping on the band wagon sharing their new found pessimistic opinions on where this system may be headed.

There were memos recently exchanged amidst one main senator and Neil Barofsky, special inspector general for the Troubled Assets Relief Program (TARP), regarding the subject of HAMP with Barofsky saying that over one-and-a-half million or so homeowners would get any type of mortgage help.

But the worrying headlines is that nearly 4 million homeowners including St Louis home loan owners that actually must have this federal help. Yet, most professionals are despondent at the reality of this number being attained.

The reason for this dreary outlook is that just under 200000 or five percent have actually moved forward from the trial docket into a permanent modification status.

But if things couldn't be worse, the inspector general's report warned that many borrowers are at risk of re-defaulting on their St Louis mortgage loans even after getting help under the federal system.

Again the critics are coming out of the wood works suggesting that these consumers are irresponsible. But the truth of the matter is, many still owe more money than what their property is worth not mentioning that others have second mortgages.

Without veering off to a great degree, I think its good to mention the abominable acts of not just the big insurance and banking leviathans but the average person who bought a home they knew they just couldn't afford and did it by taking the only type of loan that could allow them this undeserved asset. Then you have the pure fraudulent exploits of those who knowingly lied on their stated income application. Two years later, these acts have come to be known as "liar loans."

Getting back to the basics, Barofsky then displays his further skepticism basically stating that these loan modifications may not be the best program to continue offering. The Treasury department had other opinions as to the wide spread criticism.

In a long, drawn out response included in the memo, Herbert Allison, assistant Treasury secretary for financial stability said the system "should be measured by how many eligible consumers are able to avoid the pain and stigma of foreclosure by reducing their mortgage payments to affordable levels while either residing in their homes or transitioning with dignity to more suitable housing. The amount of permanent modifications is one element, but not the only element of measuring the success."

Whether this federal program meets its ultimate success or failure is second only to the fact that these key officials want us to view their ideologies from their viewpoint and no other.

Allison seems to want everyone to comprehend that the important significance is not the failing of HAMP, but that Barofsky is simply not gauging its lack of success in the correct manner.

Since Allison clearly points out that permanent modifications are really only one way to help grappling homeowners, this somehow implies that he himself doesn't firmly believe his earlier comment.

We cannot ignore the fact that these services are also offering other foreclosure prevention initiatives such as short sales as realistic alternatives. It is sad that many of these homeowners both nationally and locally can no longer meet the requirement for any type of St Louis refinancing options.

Yet, most people who have been following this system from its inception were spoon fed the amazing concept that permanent loan modifications through HAMP was the best and perhaps the only way the country would see this elusive amount of foreclosures go away.

And as we are finding out, a lot of these modifications did not include a reasonable principal reduction, which means in all likelihood, they will continue to fail.

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