Dec. 31, 2016 marks the end of a seven-year government program designed to save struggling homeowners who are behind on their mortgage; the Home Affordable modification Program or HAMP. HAMP’s sibling, the Home Affordable Refinance Program, or HARP, which was created at the same time, was extended in August until Sept. 30, 2017 in order to create a smoother transition period for a new refinance product.
Freddie Mac announced that the Freddie Mac Flex Modification foreclosure prevention program will replace HAMP that expires at the end of this year. According to Freddie Mac, it developed Flex Modification after getting input from a wide range of industry participants, and it learned lessons from earlier variations of the program. But the main fear is that there will no longer be any consistency anymore since HAMP unified everyone.
But a report says otherwise; the currently servicers first perform full reviews of applications for acceptability to HAMP guidelines and then ineligible candidates are usually subsequently screened for acceptability under proprietary modification programs. So with HAMP ending, this initial step is removed and servicers will likely be able to make faster modification decisions.
Proponents also point to the fact that proprietary loan modifications (each servicer’s own variety) will increase to fill the void that losing HAMP left.
Servicers must implement the new program by Oct.1, 2017. In the meantime, Freddie Mac’s Standard and Streamlined Modifications will remain in effect until then. HAMP expires on Dec. 30, 2016.