Chris Katopis, executive director of the Association of Mortgage Investors, has released the following statement in response to the Treasury Department’s Supplemental Directive regarding the HAMP program (SD) {10-05}: “We welcome Treasury’s latest HAMP Supplemental Directive. As the record number of home foreclosures remains all too high, and relief under HAMP has been slow to date, these program enhancements will build on the current framework in place to help responsible Americans trying to stay in their homes. We welcome the announced HAMP enhancements, particularly the principal write down alternative, which will make principal forgiveness a priority in the HAMP waterfall, replacing forbearance. The changes will ensure that where a first mortgage is written down under HAMP, the corresponding second mortgage is required to be written down proportionally, in contrast to some of the servicer practices that have obstructed mortgage modifications and homeowner relief.
"We look forward to continuing to work with the Administration and Congress on additional solutions to the nation’s housing finance problems, which should include a renewed focus on permanent principal reduction and refinancing of qualified homeowners into a new FHA-insured fixed rate 30-year mortgage. Mortgage investors support the fully underwritten and documented programs being developed by FHA to provide permanent relief to millions of at-risk American homeowners and believe a refinance with principal forgiveness provides the highest and best returns for our clients. AMI believes that providing a strong incentive, like principal reduction and a permanent refinance to a lower mortgage balance, will encourage responsible homeownership and prevent strategic defaults, a recent phenomenon that threatens the entire economy.”
The Association of Mortgage Investors represents private investors, public and private pension funds, and endowments, all of whom support the efforts of Congress and the Administration to help responsible, distressed homeowners avoid foreclosure.
