Thursday, February 25th, 2010 -- 9:18 pm
""It is one of the many ideas under consideration in the administration’s ongoing housing stabilization efforts,” a Treasury spokeswoman told Business Week . “This proposal has not been approved and there are no immediate planned announcements on the issue."
The program would put a stop to all foreclosures once a homeowner enters the loan modification program. Currently, HAMP provides incentives for lenders to modify mortgages.
Republicans, meanwhile, are up in arms over the proposal, attacking the program so far as a "failure" and blaming it for extending the housing crisis.
"'By every empirical measure, HAMP has failed,' concluded Rep. Darrell Issa, R-Calif., and Rep. Jim Jordan, R-Ohio.," according to ABC News .
Out of the 1 million homeowners who applied for the program when it was initiated last fall, just 116,000 have completed it, according to The Washington Post .
A Republican-sponsored report further claims that many homeowners would be better off simply defaulting on their loans. While utilizing a strategic loan default is in fact a useful tool for many home owners who realize they stand to lose more by trying to stay in a home as opposed to abandoning the loan, it is not an option for many.
"According to data released by the Mortgage Bankers Association, a record 15 percent of American mortgage holders are either in foreclosure or at least one payment behind," ABC News added . "In the past year, the number of seriously delinquent mortgage owners has soared."
"Last week, President Obama launched yet another initiative to avert foreclosures, offering $1.5 billion from the $700-billion Troubled Asset Relief Program to housing finance agencies in California and four other states where home prices have dropped by at least 20%," The Los Angeles Times noted in a Tuesday editorial . "The administration gave states a great deal of flexibility in using the aid, which will help them craft programs for those who owe more than their homes are worth or who have lost their jobs and need temporary or transitional help."