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The Home Affordable Modification Program (HAMP) has basically been a disaster since its start, and it remains one to this day. Roughly nine months ago, the Government Accountability Office examined the program, found many problems, and made several recommendations to improve it. Since then, the Treasury department has failed to make most of the needed changes. From GAO report (PDF):
In June 2010, we reported on several inconsistencies in the way servicers treated borrowers under HAMP that could lead to inequitable treatment of similarly situated borrowers. These inconsistencies involved how servicers solicited borrowers for the program, how they evaluated borrowers who were not yet 60 days delinquent on their mortgage payments, and how they handled borrower complaints. In addition, we noted that while Treasury had taken some steps to ensure servicer compliance with program guidance, it had not yet finalized consequences for servicer noncompliance. We made eight recommendations to improve the transparency and accountability of HAMP in June 2010. Treasury stated that it intended to implement some of the recommendations, but little action has been taken to date.
The report picks up on the fact that HAMP is a total mess that has basically failed to realize the program’s intent. The Treasury Department seems to also have little interest in implementing what sound like obvious recommendations to fix serious issues.
Treasury’s goal was to create uniform, clear, and consistent guidance for loan modifications across the servicing industry, but these differences may result in one borrower’s being approved for HAMP and another borrower with the same financial situation and loan terms being denied by a different servicer. We recommended that Treasury establish clear, specific criteria for determining whether a borrower was in imminent default to ensure greater consistency across servicers. However, Treasury believes the impact of these variations on borrowers is inconsequential and has declined to implement this recommendation. We continue to believe that further actions are warranted.
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Yet another report on on HAMP failures.
Yawn.
On edit: Wasn’t HAMP designed to fail from the start.
Geithner is not about to help homeowners. If you have watched/listened to him on interviews, in front of congress, hell–even on Charlie Rose, you’d know he is not about to do a damn thing to help this country or the people living within.
He says it often in different ways. He even told the committee on banking sustainability that he knew of not one bank that had systemic problems!
What’s more, all the commissions to clean up or regulate according to the new Dodd/Frank or whatever that new legal ruling is will be headed by himself! In other words, nothing has changed, is going to change, or fixed and the banksters can still speculate on bad practices.
Why, yes. Yes, it was.
And how long before Geithner gets another tongue bath from Ryan Lizza or Drudgico?
Lenders and Servicers have used HAMP as a scam to collect payments and fees while they are moving forward with foreclosure never intending to modify. When it became obvious to everyone, including the government, what they were doing, still nothing was done. This is precisely why people have such a low opinion of government and so much disappointment in Obama. The middle class pays and pays and pays and the bankers that committed the fraud haven’t seen a single prosecution. Who says crime doesn’t pay?
I believe their motto was “no bankers will be harmed in the execution of this fucked up program.”
So, you’re saying that, once again, the only group to benefit from taxpayer money are the banksters, at our expense?
If I had a suspicious mind, I might think there was, I dunno, some concerted effort going on somewhere.
HAMP is all chicken feed.
No real attempt was ever made to write down the principal of the mortgages, which is the only thing that would have helped borrowers in the long run.
Instead, Treasury has made sure that banks and lenders don’t lose any money on their principal, by advocating only for changing the payment schedule on loans. With the Treasury’s sicko policy, borrowers still owe the same amount of principal–ensuring that the lender is not losing any money–and thus allowing lenders to continue paying themselves huge bonuses based on the fictional value of the loans they created.
TARP and other EESA actions including Fed funds window and Central Bank debt purchases have enabled banks to crawl out from under their bad credit practices. These institutions have not passed on the intended “trickle-down” effect. HAMP denials is a case-in-point. HAMP requires banks to deliver a self-inflicted wound by dropping rates to make a payment equal 31% of income. Further servicers that are the gatekeepers make more fees from a foreclosure. Additionally the program is voluntary. What a joke.
What should happen is a universal refinance opportunity, that current investors are forced to accept, for all owner-occupied mortgages and second liens where borrowers have the option of refinancing at the current 30-year rate (4.87%) regardless of LTV, that is no principal reduction, and allow lenders to extend terms to as much as 75 years in order to get the payment at 31% of a borrowers income as verified directly from the IRS.
Make this opportunity availale to any and all owner occupied mortgages. (That is, unless you don’t really want to help main street.)