The government has announced that the HAMP foreclosure prevention plan will now provided unemployed homeowners facing foreclosure to apply for three to six months of financial aid. The new measures come on the heels of a stiff criticism of the foreclosure prevention plan which is being described as a failure in many circles. One of the most notable failures of the program is that over $75 billion has been invested into HAMP but only 170,000 homeowners facing foreclosure have completed the process out of 1.1 million homeowners who began it over a year ago. And despite this failure, the government is proposing to invest another $14 billion into HAMP to provide financial assistance for unemployed homeowners and incentives to encourage mortgage lenders to decrease the principal of home that are underwater. While the idea of HAMP is honorable its ability to effectively combat the foreclosure crisis is questionable especially with the absence of mandates that force mortgage lenders to comply.
Currently it is not clear how homeowners facing foreclosure will qualify for the unemployment financial aid. But if it is anything like the process many homeowners went through during the past year that left many waiting months just to receive an application for HAMP we could be faced another bureaucratic nightmare. While benefits for unemployed homeowners facing foreclosure sounds promising, homeowners should not put all of their eggs in one basket. Just like with the initial roll out of HAMP, homeowners could be faced with waiting and the run around. It's best to look at all of your options if you are facing foreclosure, especially your bankruptcy options.