WASHINGTON, DC – April 18, 2011 – (RealEstateRama) — The House voted last week to eliminate a mortgage relief program the Obama administration established nearly two years ago to help homeowners avoid foreclosure.
The Obama administration had predicted between 3 million and 4 million home¬owners would receive mortgage modifications through the HAMP program (a.k.a. Home Affordable Mortgage Plan) but only 550,000 homeowners across the country have actually received modifications at a cost of $840 million, according to the Congressional Budget Office.
What does this mean for Nevada?
One of the reasons the House voted to eliminate the mortgage relief program is due to the fact that these programs (HAMP, HAFA, etc.) have been misleading and have actually harmed homeowners. According to Bill Myers, Nevada Short Sale Expert and Owner of The Myers Team with Century 21, “The HAMP and HAFA programs have been a disaster for Nevada homeowners. Millions of people applied for mortgage relief believing that they could stop the foreclosure process and keep their homes.
Unfortunately, the majority of these applicants did not understand the approval criteria and as a result, wasted many months ultimately losing their homes to foreclosure.” Additionally, Myers said, “Applying for HAMP and HAFA does not stop the foreclosure process.”
The question Nevadans want to know is, “Of these 550,000 homeowners who were able to keep their homes through programs like HAMP, how many were actually from Nevada?”
According to the Lied Institute for Real Estate Studies at University of Nevada, Las Vegas, “Most homeowners in Las Vegas are so far upside down on their homes (owing significantly more than their home is worth) that they don’t qualify for the government’s $75 billion Home Affordable Mortgage Plan.” It is estimated that less than one percent of all Nevada residents actually qualify for government assistance programs like HAMP and HAFA.
“The Home Affordable Mortgage Plan didn’t work in Las Vegas because of the city’s unique housing situation,” said Barbara Buckley, former state Assembly speaker who authored the law in the 2009 Legislature that created the foreclosure mediation program.
“Homeowners have asked banks to write down principal mortgages to current values, but only 4.5 percent of those who qualify for the program saw a reduction in principal nationwide, and that figure falls to 1.8 percent in Las Vegas,” said Nasser Daneshvary, director of the Lied Institute.
House Republicans argued that the Home Affordable Modification Program has failed to deliver as promised and abolishing it would save $1.4 billion. Most House Democrats said the program should be repaired rather than eliminated.
According to Myers, “There is no easy way to solve the Nevada housing crisis; however, a non-HAFA short sale seems the best and safest choice for a Nevada homeowner facing financial hardship. Surrendering a home worth half of what you owe is NOT a failure; it’s a business decision. Facing the truth is sometimes the most difficult thing a person can do. A short sale is NOT the end. It’s an opportunity for you and your family to take control and walk away free and clear. When you do nothing, you feel overwhelmed and powerless; however, when you do a short sale, you feel the sense of hope and accomplishment that comes from knowing that you are working to get your life back on track.”
For additional information, please visit http://www.nevadashortsaleinfo.com/—–home.asp
Source: Washington Digest, “House votes to eliminate mortgage relief program,” author Peter Urban