Industry NewsMortgage

MBA floats plan for laid-off homeowners

Lenders ask government for 'Bridge to HAMP'

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The Mortgage Bankers Association wants the government to provide backing for a new forbearance program that would allow lenders cut the monthly mortgage payments of unemployed homeowners for up to nine months.The MBA says its "Bridge to HAMP" program would give unemployed homeowners time to find a job, after which they could apply for a loan modification under the Obama administration's Home Affordable Modification Program (HAMP).The HAMP program only provides loan modifications to laid off workers if they have at least nine months of unemployment benefits remaining, and a Congressional Oversight Panel created to oversee the $700 billion Troubled Asset Relief Program (TARP) has warned that the HAMP program is too narrow in scope to address foreclosures caused by unemployment.The report projected that the HAMP program will use $42.6 billion in TARP funding to support up to 2.6 million loan modifications, but that if unemployment remains elevated, 10 million to 12 million homes...