Principal Reduction Refinances to Fannie- Freddie and Hamp ALL ...

Obama administration is beefing up its efforts to help struggling homeowners avoid foreclosure.

The Treasury Department and Department of Housing and Urban Development announced Friday that the Home Affordable Modification Program (HAMP), a signature housing relief effort for the White House, was being extended by another year. Previously set to expire at the end of 2012, homeowners struggling to keep up with their mortgages can now enroll in the program through the end of 2013.

To further boost the program, the administration is tripling the amount it will pay banks to modify mortgages, as well as provide new incentives to encourage Fannie Mae or Freddie Mac to agree to principal reductions on mortgages backed by the government-sponsored enterprises. Before, HAMP only supported principal reductions for bank-held mortgages.

"These enhancements will provide additional relief to struggling homeowners, renters, and their neighborhoods to accelerate the housing market recovery and improve our overall economy," said Tim Massad, the Treasury's assistant secretary for financial stability.

The program is a signature part of the administration's efforts to help struggling homeowners grappling with the bursting of the subprime mortgage bubble. However, it has failed to impact nearly as many homeowners as originally intended. The program, established as part of federal bailout efforts, was originally intended to help modify up to 4 million mortgages, but so far has made permanent changes to roughly 900,000 mortgages. The Treasury said those mortgages have yielded monthly savings of about $500 for homeowners.

Republicans have been critical of the program, calling it ineffective and a waste of funds, and have pushed legislation to eliminate it.

But Friday's announcement received praise, not only from fellow Democrats, but also labor and industry groups still grappling with the housing crisis.

Sen. Jack Reed (D-R.I.) a top Democrat on the Senate Banking Committee, and AFL-CIO President Richard Trumka both keyed in on the administration's attempt to spur principal reductions as a key improvement.

"A well-crafted and well-implemented principal reduction program should help underwater homeowners, prevent foreclosures, and improve the housing market," said Reed.

"This initiative shows that President Obama?s strong language on the foreclosure crisis and holding bankers accountable during his State of the Union speech is more than mere rhetoric," added Trumka. " Homeowners who have been harmed by fraudulent bank practices must receive real relief in the form of meaningful principal reduction on their mortgages."

Achieving principal reductions for struggling homeowners has been a key point of contention. As Democrats have pushed hard for that sort of relief for homeowners, they have been frustrated by Edward DeMarco, the acting director of the Federal Housing Finance Agency. DeMarco, who is charge with conserving the assets of Fannie and Freddie, has resisted principal reductions as not being sufficiently beneficial.

After the HAMP changes were announced, DeMarco said the FHFA would reconsider principal reductions, taking into account the new incentives.

---

unitarian new black panther party lost in space elizabeth banks battle royale key largo arnold palmer invitational