Earlier this week, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), released a quarterly report on TARP to congress. The report was highly critical of TARP, and the Home Affordable Modification Program (HAMP) in particular. The report said that the program has fallen “woefully short” of its goal of “preserving homeownership”. They also said that the program offers “little more than false hope” to many borrowers.
If this report is not damning enough, Senator Ted Kaufman, the Chairman of the Congressional Oversight Panel said today that almost half of the permanent mortgage modifications completed by HAMP will end up redefaulting. So far HAMP has achieved about 496,000 permanent loan mods, far short of the stated goal of helping 3 to 4 million homeowners modify their mortgages.
Kaufman commented:
“At the time, our economy was on track to experience more than eight million foreclosures, so the goal was always modest compared to the boldness shown in rescuing AIG, Fannie Mae, Freddie Mac, Bank of America, Citigroup, and the auto companies. Yet now, two years later, we can see that even this modest goal will not be met. To date fewer than half a million homeowners have received permanent mortgage modifications through Treasury’s program, and as many as half of these borrowers will ultimately redefault and lost their homes.”
Kaufman also criticized the goals of the program and the way the goal posts keep getting moved:
“A goal of offering three to four million [temporary as compared to permanent] modifications is hardly a goal at all. It divorces the program’s measurement of success from its ultimate aim: to keep homeowners in their homes. In many ways, it is like a major league batter pledging to swing at every pitch. What matters is not how often you swing the bat, but how often you reach the bases.”
There is a lot more testimony that you can check out here. It is increasingly clear that HAMP is failing those it was designed to help.
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J Alexander
October 31, 2010 @ 1:04 am
Hey Kaufman,
Its not a God Dam baseball game we’re in–its our lifes work and savings, mostly invested in a home, and a continued struggle in this terrible economy to make the payments. Home ownership is NOT an American “Dream”–its a NIGHTMARE !
Furthermore, you clowns could give some thought as to where the proposed 8 MILLION FAMLIES are supposed to move to–into abandoned commercial buildings ? under bridges ? Haiti ?
Madashellhomeowner.
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R. Cruz
February 1, 2011 @ 7:18 pm
It doesn’t take a genius to figure out that the reason half of the permanent modifications will default is becuase the banks will only talk to you if you have defaulted on your loan. If a borrower wasn’t responsible enough to continue to make payments what makes them think they will change? I had a friend that didn’t make a payment for 9 months and was able to get a loan mod. We’ve been asking Citi Mortgage for a Loan Modification for over a year and they say there is nothing they can do. We are in a 30 year fixed loan at 6% and wanted to refinance to take advantage of the 4% rate and they had nothing to offer becuase of the Loan to Value. Well hello, we bought at the peak put down 25% and are still under water. By the way we had faxed over the same information multiple times after Citi stating they lost or did not receive the info, the file was assigned to different “counselors” randomly, etc. What a joke.
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