Republicans in Congress have put forward legislation to terminate the Home Affordable Modification Program SM (HAMP SM) and other initiatives that provide help to struggling homeowners facing foreclosure.
Let’s be clear about the real impact of this bill. It would shut the door on vital assistance for families who are fighting to keep their homes during the aftermath of the worst housing crisis in a generation. It would increase the number of Americans who have to endure the painful process of foreclosure. And it would put the still-fragile recovery in the housing market at greater risk.
To date, some 600,000 Americans have received HAMP permanent mortgage modifications – with tens of thousands of additional homeowners joining their ranks each month. Borrowers participating in the program have seen an average reduction of 37 percent in their payments – that’s a median reduction of more than $500 every month. In total, homeowners have already reduced their mortgage burden by more than $5 billion through permanent HAMP modifications.
But those are just numbers. HAMP is really about the 600,000 and growing number of Americans who have been able to avoid foreclosure and stay in their home because of the program.
Joe of Dorchester, Massachusetts is one of those Americans.
Joe had just purchased a home and was in the process of fixing it up when he lost his job in the construction industry in late 2009. When he realized that he would be unable to afford his mortgage, he reached out to his bank but was told that he did not qualify for assistance. His niece encouraged him to reach out to the Nuestra Comunidad Development Corporation – a HUD-approved housing counseling agency in the Boston area.
Joe received a permanent HAMP modification in March 2010. We first shared Joe’s story via the Making Home Affordable © national public service advertising campaign launched last summer. Treasury caught up with Joe today for an update on his situation.
We learned that Joe had been laid off for two weeks in January 2011 – right after the holidays. But Joe reports that he was able to keep up with his mortgage payments during that brief period of unemployment thanks to his HAMP permanent modification – which has now helped Joe stay on his feet after a second period of short-term unemployment when construction work became scarce. Today, he remains in his home and is once again employed.
“The simple fact is I knew what I had was worth fighting for,” said Joe. “I’m 45-years old, so starting over would be very difficult. My home is my sanctuary to me and keeps me close to my extended family.”
“I was out of work for two weeks in January 2011, and because my payments were reduced, I was able to pay my mortgage instead of struggling to make up the difference.”
HAMP has provided real help for real Americans like Joe who are facing foreclosure. Hundreds of thousands of Americans have lowered their mortgage payments and kept their homes because of HAMP. And HAMP has pushed the mortgage industry to offer more affordable and sustainable assistance for struggling homeowners than has ever been available before. With the housing market still recovering from its worst crisis in a generation, voting to end this program now and deny aid to struggling homeowners is simply the wrong approach.
To hear Joe tell his story in his own words, visit: http://www.makinghomeaffordable.gov/learn-more/videos/Pages/default.aspx?vid=6n_nB-tJ6jo&#fragment-3
Phyllis Caldwell is Chief of Treasury's Homeownership Preservation Office