Since President Obama took office last year, housing has been one of his administration’s top priorities. Programs have aimed to stem foreclosures by encouraging loan modifications and stimulate demand for housing with tax credits.
Now, the administration is taking a slightly different tack. The New York Times yesterday reported on a new program that will pay both homeowners and banks in an attempt to stimulate short sales.
Underwater homeowners who are delinquent on their mortgages appear to be the program’s target. They would receive $1,500 in “relocation assistance,” presumably when their home is sold. The bank that services their mortgage would receive $1,000 for the first mortgage, and another $1,000 if there is a second mortgage.
The Times reports the program will begin April 5.
This program seems to be the “Home Affordable Modification Program (HAMP)” that was announced late last year, according to HousingWire. Whether the name and details will remain is yet to be seen — the Treasury Department, which will run the program, doesn’t seem to have any information up on their Web site yet.
So far, the program is generating some controversy. Sources quoted in the Times were skeptical about whether it would be effective, and Daniel Indiviglio from The Atlantic wrote about his concerns today.
We’ll keep looking for more details, but in the meantime, any thoughts?