When the calendar turns to 2017 it will mark the end of the government’s Home Affordable Modification Program (HAMP), a seven-year program designed to save struggling homeowners who are behind on their mortgage or in danger of imminent default due to financial hardship.
As HousingWire staffer Brena Swanson notes, HAMP’s sibling, the Home Affordable Refinance Program, was extended in August until Sept. 30, 2017 in order to create a smoother transition period for a new refinance product.
A new report from Fitch Ratings explains that when HAMP expires, there will still be options for borrowers. And, when HAMP ends, Fitch states that loan modification decision timelines will shorten.
“Currently servicers first perform full reviews of applications for acceptability to HAMP guidelines; ineligible candidates are usually subsequently screened for acceptability under proprietary modification programs,” the report stated.
With HAMP ending, this initial step is removed and servicers will likely be able to make faster modification decisions.
This is likely to then translate into shorter liquidation timelines for the portion of loans that do not qualify for proprietary modifications.
However, there is a fear that without HAMP there will no longer be any consistency in the industry.
The government wants to make sure that the mortgage industry will take steps to ensure that loss mitigation is still a priority over foreclosure.