In short.. NO! The United States Treasury will NOT make your mortgage payments for you if you apply and/or are approved under the HAMP [Home Affordable Mortgage Program]. First off, there are some initial prerequisites one must qualify to be considered for this brilliant program.
- You MUST Apply for the program by filling out an affidavit and submitting to the US Treasury HAMP Office for Review and Consideration. (Affidavit and Guidelines available directly from U.S. Treasury: HAMP Affidavit | HAMP Guidelines)
- You MUST Meet Certain Criteria to be considered and eligible for the HAMP Program.
- There are several variables that the HAMP Program uses to qualify and quantify eligibility for the HAMP Program including the “NPV” Method which is a formula including qualifying ratios, net assets & net worth, net property value [a complex and often confusing formula and or algorithm predicated on several principles and scenarios that is widely accepted as the "standard" within the American Banking Industry as well as the U.S. Government in determining feasibility for a Bank or Note Holder in assessing whether or not it is in the best interest of said investor to grant a fully qualified and eligible homeowner a loan modification or if proceeding with a Foreclosure Action is in fact in the best interests of the Bank, and It's Stockholders].
Now, in regards to the Net Present Value. There is much hoopla and indeed controversy about the fairness and unbiased use of this formulation in determining feasibility and controlling and reducing a Bank’s exposure to loss or whether it is used to determine what will in fact yield the highest rate of return for the Bank and It’s Shareholders. The “controversy” or disparity is a direct result in what has been published in the guidelines and what is and what is not available to the General Public for review and comprehension is the second part of the guidelines. This charge comes from “Paul” Author and poster of:
GOP Idea: Understand the NPV Test in the Obama Housing Plan — Then End It
Article was written and published on May 12th, 2009 and questions not only the Making Home Affordable Program but it’s practical use in relation to the “cost” to American Tax Payers.
Now this program is presently passed into Law and met with the majority votes and approval in the U.S. Senate to be ratified into law. I am no rogue scholar nor would I ever and do not presently profess and/or presume to be an Economist (on any level micro or macro). I am however a pragmatist and realist and an absolute fanatic about seeking information (when available) as well as doing my very best to review, and best understand the material to which I am reviewing. Having said all that, I would like to share with you all the some of the program highlights initially and then I will go into what is in “My” opinion the benefits of this program’s cost and the subsequent return on its investment of the American Tax Payers Monies.
- “Borrowers will be eligible to accrue up to $1,000 each year in Pay-for-Performance Success Payments for up to five years, a total of up to $5,000 over five years, subject to certain de minimis constraints. Accruals are based on on-time payment performance.”
- “The first annual principal balance reduction will be effective 12 months after entering the Trial Period as long as the borrower is not terminated from the program. In any given month, the borrower’s mortgage payment must be made on time, accounting for standard servicer grace periods, in order to accrue the monthly Pay for Performance Success Payment.”
- “The borrower will receive information on a monthly basis regarding the accrual of these payments.”
- “The payment will be directed to the servicer, who will reduce the principal balance by the payment amount (but not by more than $1,000 per year) for five years if the borrower continues in the program.”
- “Payments are to be applied directly and entirely to reduce the principal balance, and any applicable prepayment penalties on partial principal prepayment made by the government must be waived.”
- “The equivalent of three months of Pay-for-Performance Success Payments will be made upon successful completion of the Trial Period, contingent upon the servicer signing a service agreement with the Treasury.”
- “Similar incentives will be paid for Hope for Homeowner refinances.”
Okay, so there you have the General Benefit to each and every American presently dealing with the real prospect of losing their homes and/or are facing the looming challenges and obstacles in attempting to preserve and protect their rights to ownership as defined and ratified in the United States Constitution Fourteenth Amendment:
Section. 1. All persons born or naturalized in the United States and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
Amen!
Finally, for more information on resources, the book “HOME SOS!” Save My Home! as well as forms, documents, links to some wonderful Government, Non-Profit and even For Profit Organizations and Service Providers, please visit: www.HomeIsWhereTheSmartIs.com or email: info@homeiswherethesmartis.com [for media inquiries please email: media@homeiswherethesmartis.com].
“A-Too-La-Loo”
Okay, I have shared with you all the program highlights as they pertain to the various benefits available to ALL American Citizens that are presently in an active foreclosure and/or facing one based on loss of income, loss of revenues (if a self-employed person) loss of assets and or income payable towards:
Income Taxes (State & Federal), Health Care Costs (over and beyond what is covered by one’s individual or group health insurance policies and after successfully satisfying the annual deductibles and “co-payments” as detailed in the individual or group policy), indebtedness due to revolving credit card use and balances carried, expenditure or personal cash investments for expansion and/or acquisition of employees or contracted personnel to effectively benefit a self-employed person’s revenues and “bottom-line’. Increase of daily cost of living expenses for any individual and/or family as it pertains to: Food, Prescription Medicines, Insurance Premiums [Vehicle, Home, Medical, Life, Mortgage Protection, Accidental Injury/Death, Travel, Credit Guard or Identity Theft Protection, Interest Payments on Consumer Loan Payments, Taxes, Gasoline, Vehicle Maintenance, Education Costs (not covered by Public School System), Private Tuitions and University Tuitions (non-scholarship subsidized costs), Non-Covered Work Related Costs (i.e. Bus or Train Fares, Parking Fees, Bridge & Toll Fees, Citations, Cost Directly Associated with Wear & Tear, Tools & Supplies, Dry Cleaning, Uniform Deposits and or Direct Cost, Meals (not covered by Employer) Taxes on Meals (as this is considered income as defined by IRS Code), Co-Operative Participation Fees (i.e. Ride Shares, Zip Car Program Participation Fees, etc), and so on.
Phew! As I was typing this I thought to myself, Goodness! We Americans carry a great burden of cost and responsibility as it pertains to the "real" cost of living. You may have noted the visibly absent cost of Dining Out, Movies, "Creature Comforts" (i.e. a box of milk duds, a smoothie from the local Smoothie Shop, a Frozen Yogurt, an Ice Cream Treat from the Friendly Neighborhood Mobile "Ice Cream Man", the cost of a card or note congratulating a child or sibling or even a friend or co-worker. How about those Company "Pools" where everyone is made uncomfortably obligated to take part in "chipping" in for a cake, or gift for a co-worker or Boss? The list can go on forever it may seem.
I wanted to make this point [even if I went to the "far" side of the spectrum to make it; for one reason and one reason only. The cost of the HAMP Program as it relates to direct cost and disbursement of American Tax Payer Money, as well as the real scope, breadth and overall reach of the program itself being made available to the Ten Million some odd Homeowners [a very conservative number] is miniscule in relation to the cost and overtaxing of Government Resources, Programs, Welfare, Un-Employment, Government Subsidies and Hand-Outs that will be necessary to properly care and provide for (even in the most fundamental needs) for ALL The American Families and Individuals directly affected by the Housing Crisis America presently faces. I don’t want to get political or lean towards any particular direction as it pertains to “left” or “right”. I am a proud American that leans towards what is fair, equitable, feasible and in the very best interests of ALL Americans from ALL walks of life, creed, race, religion, orientation, beliefs, opinions, and so on. [Sorry folks, I have NO interest whatsoever in running for Public Office; I am much too much of a neat freak to ever take part in that environment~ (teehee)].
“So I have managed to get off course there and now wish to reign this back into focus. What is America’s ROI (return on investment)?”
Now listen my Poppets.. I want you all to PLEASE fact find, investigate, seek out knowledge and awareness in whatever capacity you consider fit and reliable to do so. DO this not only for your own edification, but in fact as your CIVIC DUTY as bound and pledged to your Country. Surely You remember the words.. “I Pledge Allegiance to the Flag of the United States of America, and to the Republic, for which it stands, One Nation, Under GOD, for Liberty, and Justice for ALL“.
The Benefits:
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March 14, 2010 at 12:56 pm
larry g.
A lot to think about here Hiwtsi…thank you for your insight into this.