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.