Bill coming due for New Yorkers in mortgage plan as rates rise

Mortgage-modification program HAMP only "kicked the can down the road"

TRD New York /
Feb.February 21, 2014 03:40 PM

A segment of New Yorkers who use a federal program to temporarily lower their mortgage payments could again find themselves at risk of default, industry experts have said.

The Home Affordable Modification Program, initiated in 2009, lowers the interest rate on home loans for five years.

But with the five-year period coming to an end for many HAMP participants — and with household incomes barely rising over that time — many homeowners will again be expected to pay interest rates they can’t afford.

“From the beginning, it was very evident this was going to be a problem,” said Greg McBride, the chief financial analyst for Bankrate.com, told the New York Times. “HAMP was only ever designed to kick the can down the road.”

Homeowners in the program will see their interest rates gradually rise by up to 1 percent annually until they hit the national average at the time of the modification, the Times noted. HAMP participants in New York will see a median payment increase of an estimated $286 a month, according to the article. Congress has been skeptical since the program’s inception, which has only seen modest success, according to reports. [NYT] Angela Hunt


Related Articles

arrow_forward_ios
A rendering of 165 Broome Street (Credit: Handel Architects)

Nonprofit plans affordable housing development near Essex Crossing

Nonprofit plans affordable housing development near Essex Crossing
All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag

All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag

All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag
New York Attorney General Letitia James and 63-36 99th Street in Rego Park (Getty; StreetEasy)

“Not on my watch”: AG Tish James fines developers who violated 421a

“Not on my watch”: AG Tish James fines developers who violated 421a
902 Drew Street and 400 East 58th Street (Google Maps)

New York’s multifamily sales improve in Q3

New York’s multifamily sales improve in Q3
The number of mortgage borrowers in Covid-19 forbearance plans ticked down again this week. (iStock)

3M homeowners remain in forbearance

3M homeowners remain in forbearance
(iStock)

Older Americans increasingly saddled with housing debt

Older Americans increasingly saddled with housing debt
(Getty, iStock)

Mortgage applications to buy homes decline for fourth straight week

Mortgage applications to buy homes decline for fourth straight week
(iStock)

Black homeowners pay $13K more for home loans: study

Black homeowners pay $13K more for home loans: study
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...