Home Affordable Modification Program - HAMP

Losing our phone or our keys is annoying. It can really ruin our day. But losing our house? That can ruin way more than our day.

It’s a situation homeowners hope to never be in, but in 2008, an economic recession and the subprime mortgage crisis led to over 800,000 homes being foreclosed in the span of about 12 months. The real estate mortgage was in hemorrhage mode, and American homeowners were really feeling the pain. Tons of borrowers who had promised to pay back the loans they were given...reneged.

In an effort to try and stop the bleeding, the Home Affordable Modification Program (HAMP) was introduced in 2009. If homeowners met the program’s requirements, the government would step in and help them stay out of foreclosure by either reducing their monthly mortgage payment, hooking them up with a lower interest rate, or taking other measures to make their home loans more doable. And all homeowners had to do was prove that: (a) they couldn’t make their mortgage payments, (b) a foreclosure wouldn’t benefit them or their bank financially, and (c) they owed less than $730K on their home loan.

Was HAMP 100% successful? Well, by 2014, over nine million American households had been foreclosed, so critics say no. But fans say the numbers would have been much worse if the government hadn’t stepped in; the U.S Treasury estimates that HAMP helped save more than five million homes by the time the program was sunsetted in 2016. So that’s something.