Better Mortgage Modifications than HAMP with the REST Report

Before the current mortgage crisis, few homeowners had even heard of a mortgage modification. You’d have to be a real estate heavyweight, a real Donald Trump, to know the process existed. Even today, many people believe the Home Affordable Mortgage Plan, or HAMP, is synonymous with mortgage modification. A distressed mortgage owner needs to know that every lender has their own mortgage modification plan, and has since the institution opened for business.

It would come as an even bigger surprise to any distressed mortgage owner that many of these in-house mortgage modification plans are financially more beneficial to relieve a distressed mortgage than HAMP.

From the beginning, a distressed mortgage owner must understand that a mortgage modification is a negotiation. The lender must be convinced that renegotiating a non-performing mortgage is a better business move than foreclosure. Distressed homeowners don’t have the tools to successfully negotiate a beneficial mortgage modification.

The bottom line of any mortgage modification is a new mortgage payment of 31% of new stable income. To that end, whether HAMP fits the bill or an in-house program is moot.

The REST Report uses bank software to calculate those adjustments, HAMP qualified or not. Since the calculations are mortgage industry-determined, there is no place for the lender to run when confronted – in or out of court – when they avoid good-faith mortgage negotiations. The results have been spectacular.

Last month, five times as many homeowners dropped out of HAMP than obtained permanent modifications. Its numbers of new trials and permanent modifications both declined in May. But there might be a reason why it’s doing so badly: more attractive private servicer modification programs are crowding out the need for government assistance.

The vast majority of borrowers are choosing private modification programs over HAMP. In fact, some banks indicated that they often successfully modify mortgages for borrowers who didn’t even qualify for HAMP.

Posts point to $75 billion on HAMP as a bad investment. What they don’t realize is that only a fraction of that has been spent. This is another indication that HAMP hasn’t worked.

The government’s insistence on mortgage modification and creation of HAMP might have driven private programs to succeed as well. Once these servicers realized they would be forced to participate in HAMP, due to their acceptance of bailout money, they devised their own proprietary modification programs instead. In this case, it’s possible that HAMP’s existence helped to create the private mortgage modification market.

This YouTube video says it all. Go here: How to Get A Beneficial Mortgage Modification Now Please ‘Like’ the video, will you? That makes it easier for others to find.

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