Definition
The Homeowners Affordability and Stability Plan (HASP) was spearheaded by the U.S. government during the financial crisis of 2008. The plan aimed to stabilize the housing market and assist struggling homeowners by offering mortgage refinancing and modification options. The primary objective was to prevent foreclosures and keep families in their homes by making mortgage payments more manageable through reduced interest rates, extended loan terms, and principal forbearance.
Examples
- Refinancing Under HASP: A homeowner with a high-interest rate mortgage could refinance their loan to a lower rate through HASP, resulting in reduced monthly payments and increased affordability.
- Loan Modification: A family facing financial hardship due to a job loss could apply for a modification under HASP, which might reduce their interest rate, extend the loan term, or temporarily forbear a portion of their principal to lower monthly payments.
Frequently Asked Questions (FAQs)
Q1: Who was eligible for the HASP program? A1: Homeowners with mortgages owned or guaranteed by Fannie Mae or Freddie Mac, and who were current on their payments but unable to refinance due to diminished home values.
Q2: What was the main goal of HASP? A2: The main goal of HASP was to help homeowners maintain affordability and avoid foreclosure by offering refinancing and loan modification assistance.
Q3: Did HASP help prevent foreclosures? A3: Yes, HASP played a significant role in preventing foreclosures by providing mechanisms that made mortgage payments more manageable for struggling homeowners.
Q4: How did one apply for HASP assistance? A4: Homeowners had to contact their mortgage servicer and provide required documentation to determine eligibility for HASP programs.
Related Terms
- HARP (Home Affordable Refinance Program): A program within HASP aimed at helping homeowners refinance their mortgages at lower interest rates, even if they owed more than the home’s current value.
- HAMP (Home Affordable Modification Program): Another program under HASP providing loan modifications to avoid foreclosure by reducing monthly mortgage payments to affordable levels.
- Foreclosure: The legal process by which a lender attempts to recover the amount owed on a defaulted loan by taking ownership and selling the mortgaged property.
- Principal Forbearance: A mortgage modification option that involves deferring a portion of the unpaid principal balance to the end of the loan term.
Online Resources
- Official HASP Program Information
- Making Home Affordable Website
- Fannie Mae Disaster Response Network
References
- Obama Administration. (2009). HASP Fact Sheet. https://www.obamaarchive.org.
- Department of the Treasury. (2009). Making Home Affordable Program: Distressed Asset Stabilization Program. https://www.treasury.gov.
Suggested Books for Further Studies
- “The Home Affordable Modification Program: An Assessment of Servicer Performance” by Eric S. Belsky and Hal S. Luft
- “Foreclosure Nation: Mortgaging the American Dream” by Shari B. Olefson
- “Housing Policy in the United States” by Alex F. Schwartz
Real Estate Basics: HASP Homeowners Affordability and Stability Plan Fundamentals Quiz
### Which government-led program was designed to help stabilize the housing market during the 2008 financial crisis?
- [ ] HUD
- [ ] FHA
- [x] HASP
- [ ] USDA
> **Explanation:** The Homeowners Affordability and Stability Plan (HASP) was specifically created to mitigate the effects of the housing market crash during the 2008 financial crisis by providing mortgage assistance.
### What does the acronym HASP stand for?
- [ ] Homeowners Affordability and Security Program
- [x] Homeowners Affordability and Stability Plan
- [ ] Homeowners Assistance Stabilization Plan
- [ ] Housing Affordability Support Program
> **Explanation:** HASP stands for Homeowners Affordability and Stability Plan, a significant initiative to help homeowners manage their mortgage payments.
### What is a primary goal of HASP?
- [ ] Increase mortgage rates
- [x] Avoid foreclosures
- [ ] Deregulate mortgage lending
- [ ] Reduce property taxes
> **Explanation:** The primary goal of HASP was to prevent foreclosures and stabilize the housing market by making mortgage payments more manageable.
### Under HASP, what type of property owned or guaranteed by which entities were eligible?
- [ ] HUD and USDA
- [ ] VA and FHA
- [x] Fannie Mae and Freddie Mac
- [ ] U.S. Treasury and IRS
> **Explanation:** Mortgages owned or guaranteed by Fannie Mae and Freddie Mac were eligible for relief under HASP.
### What type of change does principal forbearance involve?
- [ ] Increasing interest rates
- [ ] Reducing property value
- [ ] Foreclosure processes
- [x] Deferring a portion of mortgage unpaid principal
> **Explanation:** Principal forbearance, often used in mortgage modifications, involves deferring a portion of the unpaid principal.
### What was the main qualification criteria for homeowners seeking HASP assistance?
- [ ] Being late on mortgage payments
- [x] A mortgage owned or guaranteed by Fannie Mae or Freddie Mac
- [ ] Having a perfect credit score
- [ ] Owning multiple properties
> **Explanation:** The main qualification for HASP was having a mortgage owned or guaranteed by Fannie Mae or Freddie Mac, along with being current on existing mortgage payments.
### In what ways did HASP intend to assist struggling homeowners?
- [ ] Reducing property taxes
- [ ] Providing direct financial aid
- [x] Offering mortgage refinancing and loan modifications
- [ ] Waiving all future payments
> **Explanation:** HASP aimed to assist homeowners by offering mortgage refinancing and loan modification options to lower monthly payments.
### Which internal programs were part of the larger HASP initiative?
- [x] HARP and HAMP
- [ ] FHA and VA
- [ ] Family Impact Fund
- [ ] Community Investment Plan
> **Explanation:** HARP (Home Affordable Refinance Program) and HAMP (Home Affordable Modification Program) were key programs within the HASP initiative.
### Why is principal forbearance utilized in HASP?
- [x] To temporary reduce monthly payments
- [ ] To increase the loan balance
- [ ] To immediately recover the unpaid principle
- [ ] To suspend collecting property taxes
> **Explanation:** Principal forbearance is used to temporarily reduce monthly mortgage payments by deferring a portion of the unpaid principal.
### Who implements, monitors, and guides mortgage servicers for compliance with HASP guidelines?
- [ ] Local government bodies
- [ ] Non-profit organizations
- [x] U.S. Department of the Treasury
- [ ] State Housing Development Agencies
> **Explanation:** The U.S. Department of the Treasury is responsible for implementing, monitoring, and setting guidelines for mortgage servicers under HASP.
