Treasury Releases Loan Mod Guidelinesby Tim Manni
Two weeks after President Obama announced his Homeowner Affordability and Stability Plan (HASP), the Treasury has released the guidelines to the loan modification portion of that plan. The initiative is aimed at targeting three to four million “responsible” borrowers who are struggling to stay current on their monthly payments.
“Today, we are providing servicers with the details they need to begin helping eligible borrowers,” said Treasury Secretary Tim Geithner in this morning’s press release.
Washington is betting a lot of their chips on the loan mod process despite its history of marginal success. If, having bet that money, a significant percentage of the modified mortgages re-default, what’s Plan B? Will those homeowners be allowed to go into foreclosure? Or, like AIG, will we end up bailing them out again… and perhaps again after that?
Despite the controversy, the modification details still include “Pay-for-Performance Success Payments” of up to $5,000.
The program which will begin today is set to conclude December 31, 2012.
Click here to view a “consumer friendly” Q&A of the Making Home Affordable (MHA) plan.