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Mortgage Crisis: The Stomach Churning Failure that Is HAMP

Calculated Risk has been crunching numbers again. These are really dismal. People who were SUCCESSFUL in getting HAMP modifications have an median income to debt ratio of 79.9.

That means that AFTER getting mortgage modification 67% of that family’s gross income went to debt service. That’s before you paid the utilities, before you bought the groceries ,before you have paid for transportation to work, before you spent the legally mandated 9.4% of your income on health insurance.

So let’s do some math:

Family of 4, gross income of $50K

50,000

–     33,500   (67% for debt service)

___________

16,500

–      4,700   (9.4% for health insurance)

_________

11,800

–       6,500   (FICA 13%)

_______________

5,300

–    7,000     (food using USFDA #)

___________

Whoops = -1700!

That’s a negative integer! and we still have not paid any income tax or spent any money of travelling to work to earn that $50K or paid any utilities. Sorry, no lights or heat for you.

Can any sentient being continue to make the argument that HAMP is a worthwhile program? Really now. We need a meaningful and SUSTAINABLE mortgage modification program that writes down principle amounts to reflect current market prices. This will put a floor under the housing price collapse and stabilize neighborhoods as well.

This is not rocket science, it’s simple math.

[Earlier posts in this series and related links at FDL’s Foreclosure Fraud Resources]

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Cynthia Kouril

Cynthia Kouril

Cynthia Kouril is a former Special Assistant United States Attorney in the Southern District of New York under several different U.S. Attorneys, former counsel to the Inspector General for the N.Y.C. Department of Environmental Protection where she investigated threats to the New York City water supply and other environmental crimes, as well as public corruption and fraud against the government, former Examining Attorney at the N.Y.C. Department of Investigation and former Capital Construction Counsel at New York City Parks and Recreation.
She is now in private practice with a colleague whom she met while at the USA Attorney's Office. Ms. Kouril is a member of the Steering Committee, National Committeewoman and Regional Coordinator for the New York Democratic Lawyers Council, a member of the Program Committee of the Federal Bar Council and a member of the Election Law Committee at the Association of the Bar of the City of New York. She is active in several other Bar Associations.
Most important of all, she is a soccer mom.

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