On March 26, the Obama Administration announced a series of adjustments to the Home Affordable Modification Program (HAMP) and to the Federal Housing Administration (FHA) programs to assist homeowners who have been affected by the current economic crisis. Borrowers get assistance in three ways through the HAMP expansion: The unemployed can get a three-to-six-month forbearance on their mortgage payments, after which they will be evaluated for a loan modification. Banks will get financial incentives to reduce the principal balances of delinquent, underwater borrowers. And borrowers who are current on their mortgages, but underwater, can refinance into loans backed by the FHA.
Marietta Rodriguez, deputy director of National Homeownership Programs and Lending at NeighborWorks America, said that the recent changes are a positive move and will hopefully ease some of the pressure that those seeking re-employment are feeling.
In an interview with CNNMoney.com Rodriguez added that the expansion will help convince people to stay in their homes.
"For many borrowers, it's really hard to justify figuring out a payment plan for a property that's so underwater," she said.
Read communication about these changes from HUD Assistant Secretary for Housing/Federal Housing Commissioner David Stevens.
More information about the impact of these changes is available at CNNMoney.com.
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