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Who dealt this mess anyway?

October 26, 2010

Who dealt this mess anyway?

Principal Reduction Alternative Update HAMPWhen my mom played cards and was dealt a bad hand, she would always make a face and say “who dealt this mess?”. And that is what we have all been saying lately, including me. We have an idea who dealt the mess. Now the point is, how to deal with it logically, fairly, in a way that will actually help struggling home owners, possibly help to stabilize the real estate market.

Michael Lissack left a fantastic message of hope (I hope) in a comment on my post “How long are we going to tip toe around this big huge elephant in the room anyway?”. His news is well worth a read, and may be the best news I have seen for struggling home owners. He enlightened us all on a HAMP update which was endorsed by the US Treasury Department on October 15th, and sent out to all servicer representatives registered for the Home Affordable Modification Program.

Read about it here. Principal Reduction Alternative Update

Please take a moment to read it. Incentives will be given to lenders to reduce the principal, with the opportunity to recoup some or all of the loss if the property value increases in the future.

This makes total sense to me, at least more sense than what has been happening thus far. The real question is, will this directive be followed? Can HAMP actually work?

Maybe then we could all stop asking my mothers infamous question, “who dealt this mess?!”

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