By Lisa Prevost | The New York Times
The federal government’s Home Affordable Modification Program, known as HAMP, was designed to keep borrowers from losing their homes to foreclosure. It has resulted in lower monthly mortgage payments for more than a million homeowners.
But some industry experts are now questioning whether HAMP has only prolonged the inevitable. HAMP modifications are a five-year deal, and after that, the interest rate on the loan, which was typically reduced to as low as 2 percent, begins to gradually adjust upward.
Given that household incomes have been largely stagnant since the first HAMP modifications were approved in 2009, as the payments on these loans begin rising this year, many homeowners will find that they are once again at risk of default.
