Article from the Denver Post Regarding the "HAMP" Program

(Below is an article that gives a quick, thumbnail summary of the "HAMP" program. The Wells Fargo spokesman wants you to believe that his company is looking out for the best interests of its borrowers ... but what the article doesn't tell you are the multiple ways that WF and other lenders are stonewalling, delaying, smokescreening, and looking for any loophole possible to avoid giving homeowners the modfications they deserve).

HAMP offers a quick way to reduce mortgage payments
By Tom Barry Special to The Denver Post

The frequently used adage of "if it seems too good to be true, it probably is" almost always holds true. But the saying is proving false for many participants in the government's new Home Affordable Modification Program, known as HAMP.

The U.S. Treasury created the program as part of the Troubled Asset Relief Program, or TARP. It is intended to help struggling home owners work with their lenders to make their payments more affordable.

"The U.S. Treasury has introduced a streamlined process to expedite more affordable monthly mortgages addressing current financial hardships," said Meg Reilly, a spokeswoman from the Treasury Department. "We surpassed our goal sooner than anticipated with over one-half-million borrowers who already have trial modifications underway."

Though the program got off to an uneven start, and some lenders have been slow to participate, HAMP is proving to be a lifeline for those who have gone through the process.

More than 25,000 applicants are being processed each week through HAMP, Reilly said. She added that the $75 billion loan-modification program includes $50 billion in funding from TARP.
To qualify for HAMP, a home owner's monthly mortgage, including principal, interest, taxes and insurance, must be greater than 31 percent of total gross monthly income. "Once a mortgage modification is approved, it will reduce a monthly mortgage to 31 percent of monthly income for at least five years," Reilly said.

There is no cost (from the lender) to have a mortgage modified in HAMP. "Through HAMP we can reduce a homeowner's payment by lowering the interest rate to as little as 2 percent, extending the repayment term to as long as 40 years to provide a longer time to repay the loan, and setting aside some principal," said Tom Goyda, a corporate spokesman for Wells Fargo Home Mortgage in Des Moines, Iowa.

The reduced interest rate will remain in place for five years. After that period, the interest rate can only go up to a capped current market rate based upon the day the modification is effective per Freddie Mac's weekly market rate survey. Currently the maximum the rate could reach is approximately 5 percent.

"Our goal is to have delinquent customers or those who are current but know they are going to have trouble making their mortgage payments to receive timely financial assistance to lower their payments through a modification or some other means," Goyda said. "We've hired and trained more than 5,800 additional employees this last year in our home-retention department to address the increased demand."

Wells Fargo was among the lenders criticized early in the process for not modifying enough eligible mortgages.

The HAMP process generally consists of a homeowner contacting his or her mortgage provider. Home-retention specialists ask questions and request documentation to determine qualification.
Upon preliminary approval, a homeowner will be placed on a three-month trial with a lowered monthly mortgage payment while the documentation is processed and reviewed.

"We are making many of the HAMP forms available online and many can be signed and forwarded with an electronic signature to expedite the process," Reilly said.

Once final approval is received after the trial period, the HAMP applicant will receive documentation in the mail outlining all details. Since this program is still in its infancy, a two-month trial period extension is possible if needed to provide all documentation.

The deadline to participate in HAMP is Dec. 31, 2012.