JP Morgan: Obama’s housing program could help 500,000 more homeowners
President Obama has a sweeping new housing plan that has a slim chance of getting anywhere in Congress. But that doesn’t mean the White House doesn’t have its own tools at its disposal. Last month, the administration expanded its own program to help more home owners with mortgages held by Fannie Mae and Freddie Mac — a move that a new JP Morgan reports says will ultimately help about a half-million borrowers modify their mortgages.
(Associated Press)
In January, the Treasury Department made changes to the Home Affordable Modification Program to make it easier for borrowers to apply for mortgage modifications that would lower their payments or lower their principal, making them less likely to go into foreclosure. A new JP Morgan report estimates that the changes will lead 1.9 million more potential borrowers to qualify for mortgage modifications, along with 500,000 investors who rent properties, according to Housing Wire.
Altogether, JP Morgan expects the HAMP expansion “to result in 500,000 mortgage modifications that otherwise would not have taken place.” That would help HAMP get back on track with its intended mission: Both HAMP and its cousin HARP (Home Affordable Refinance Program) reached only a fraction of intended beneficiaries, due to recalcitrant mortgages services, fraud, overly stringent rules and other problems. Altogether HAMP has reached only about 900,000 borrowers, well short of the Obama administration’s 3 to 4 million target.
If the changes to HAMP end up succeeding, it could help the Obama administration build the case for the mass refinancing plan they’re pushing to Congress.
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