Washington, DC—Today, the Treasury Department and the Department of Housing and Urban Development announced an extension of the Obama Administration’s Making Home Affordable Program through December 31, 2015. The Center for American Progress’ Director of Housing Finance and Policy Julia Gordon issued the following statement about the new deadline:
The HAMP extension is great news. Approximately 5 million homeowners remain in foreclosure or in some stage of delinquency, and they desperately need access to affordable and sustainable modifications. Now that this program will be in place for another two years, we hope that FHFA will reconsider its position on principal reduction.
For homeowners who have loans backed by private investors, HAMP loan modifications often include a reduction to the principal balance of the mortgage, which enables homeowners to rebuild equity in their homes faster and helps prevent re-defaults on the modifications. However, FHFA, which is the conservator for Fannie Mae and Freddie Mac, does not permit the mortgage giants to reduce principal, although the Treasury Department’s calculations, a Congressional Budget Office report, and even FHFA’s own internal analysis have all showed that such a move would save taxpayers money.
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