White House Extends HAMP to End of 2013, Boosts Incentive for Reducing Loan Principal

The Obama administration announced Jan. 27 that the Home Affordable Modification Program will be expanded and extended to Dec. 31, 2013, the existing deadline of the Home Affordable Refinance Program.

Treasury Assistant Secretary for Financial Stability Tim Massad unveiled the decision in a blog post. HAMP expansions mentioned in it include:

• offering Treasury payments to Fannie Mae and Freddie Mac if they allow servicers to forgive principal in conjunction with a HAMP modification;
• increasing the financial incentives available to investors who agree to reduce principal for borrowers, paying from 18 cents to 63 cents per dollar of principal reduction, depending ...