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Treasury Notes

 HAMP Provides a Happy Homecoming for a Service Member and His Family

By: Phyllis Caldwell

Just over a year ago, Vanessa’s husband, who is in the Navy, was deployed to Afghanistan under Operation Enduring Freedom. Vernon’s tour was expected to last about 11 months. Vanessa prepared herself for all this would entail and how she would balance her job, her role as primary caregiver to their two daughters, and management of the household expenses. To make things even more difficult, Vanessa and Vernon had a variable-rate mortgage on their San Diego home that was due to reset.

“I had a husband overseas and two children to worry about every day,” Vanessa said. “Worrying about my mortgage every month just added to my stress.” When Vanessa and her husband realized their mortgage payment would rise to nearly $2,300 each month, and they were only paying down interest, she decided to contact her bank to see what options were available.

“I contacted my servicer and did a lot of research online. That’s where I learned about the Making Home Affordable © Program, and I asked my servicer about our eligibility,” Vanessa recalls. “I completed and mailed all of the required documents.”

Vanessa and her husband applied for a trial modification under the Home Affordable Modification Program SM (HAMP SM) and began making reduced payments in June 2010. “I read all of the paperwork and directives very carefully,” Vanessa said. “As soon as my trial payments were finished, I reached out to my servicer again to confirm my permanent modification.”

Vanessa made two additional trial payments and kept following up with her mortgage servicer. “At first I was patient with my servicer,” she said. “Then I became worried that my modification was not complete. I called them every day.” Vanessa’s persistent calls and letters were successful. Her trial modification became permanent in January 2011.

“My monthly payment dropped by almost $400 and now includes principal, interest, taxes and insurance. I was so relieved,” Vanessa said. “It really was a Happy New Year for me!”

Vernon returned home to San Diego in February 2011.  “I’m so happy to have my family together in our home,” Vanessa said.

Before the HAMP program, little meaningful assistance was offered to struggling homeowners like Vanessa and Vernon.  For many of these homeowners, HAMP offers the most sustainable assistance available today.

HAMP is not designed to prevent every foreclosure. But currently, between 25,000-30,000 additional homeowners receive a permanent HAMP modification every month.  HAMP is part of the Administration’s efforts to help the housing market recover fully from an historic housing crisis and has been carefully designed to protect taxpayer interests.  Money is only spent when a homeowner gets assistance and is able to continue making their payments on time.

As Congress considers a bill to terminate HAMP, it is important to remember the homeowners across the country like Vanessa and Vernon who continue to benefit from the program.  Foreclosure has devastating impacts for families, communities and our economy.  In the midst of the worst housing crisis in a generation, eliminating such vital assistance as some in the U.S. House of Representatives have proposed, would be a terrible mistake.

Phyllis Caldwell is Chief of Treasury's Homeownership Preservation Office.

Posted in:  Making Home Affordable
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