We had said it many times that the current Obama Plan aka HAMP is inadequate to stop the increasing foreclosure and combat the rising foreclosure rate across USA. Basically, the HAMP has no teeth in any enforcement, and despite all the tought talk, the banks are free to deny the deserving homeowners the right to modify their loans. Banks had too many grounds to deny any deserving homeowners. We had suggested that only a very small legislation is required to fix the homeownership in USA. We had proposed earlier and we like to add again here.
-All homes are entitled to loan modification regardless of the income group and regardless of the interest rate.
-Every home is entitled for loan modification and that includes investors homes as well.
-only 2% interest rate should be charged by banks.
-Banks can increase after the initial 5 years to whatever the market rate justifies.
-No documentation should be required for any loan modification.
-Banks should be asked to do the loan modification with 15 days.
-Banks who comply the above requirements should be entitled to get $2000 from homeonwers and $1000 from administration.
-These steps would give more revenue to bank to hire more people, add phone lines and faxes.
Now, NY Times has also added their weight to whatever we had been asking previously. Here, is the article from NY Times.