The HAMP Program is a program that the government rolled out to help distress homeowners in these tough economic times. Lenders are given "monetary incentives" to help borrowers with Loan modifications rather than foreclosures. However, due to the housing downfall, HAMP is unable to assist as many homeowners as they would like.
There have been 467,000.00 borrowers who were given a loan modification under the HAMP Program. However, there have been a total of 5.5 million homeowners who will have to start the foreclosure process and there is 1.7 million borrowers whose homes have been foreclosed upon. As of September, 2010, the HAMP Program showed a decrease in Loan Modifications for the month of September. It was also noted that a majority of borrower that were enrolled in the Forbearance process decided to withdraw from the program and 11% of homeowners had gone delinquent on the new mortgage payment.
The FDIC Chairman Shelia Bair spoke at the housing and mortgage summit about the possibly idea of "Safe Harbor" for lenders. An example of Safe Harbor is if a borrower is given a loan modification and can't keep up with the new modified payment the lenders would be given "Safe Harbor" from the government after foreclosing on the property.
