Instead, the Obama administration rolled out the industry-backed Home Affordable Modification Program (HAMP), relying on the voluntary cooperation of servicers to modify mortgages. The program was, even by the administration’s own modest objectives, weak, ultimately reaching less than a quarter of the three to four million homeowners it hoped to target. In the critical first two years, the administration did not actually spend step 3 % of what they were allotted to save homeowners.

The newest capability of the application form structure, using its simple cancellation thresholds ($10,000/$20,000) and you will qualifications requirements (Pell reputation and you may family income), means the policy should send nearly ninety % of the save dollars to people while making less than $75,000 annually

Just as with cramdown, one reason the Obama administration failed to swiftly help homeowners was their obsession with ensuring their policies didn’t help the wrong type of debtor. When Obama first announced HAMP in 2009, he said the program would not reward folks who bought homes they knew from the beginning they would never afford. Read more “In one single instance severe analogy, new servicer arm away from Financial away from The united states”