Lawmakers Call on Treasury to End Failing $75 billion Mortgage Modification Program
WASHINGTON, DC – Oversight and Government Reform Committee Ranking Member Darrell Issa (R-CA) and Domestic Policy Subcommittee Ranking Member Jim Jordan (R-OH) are calling for an end to the Treasury Department’s much maligned Home Affordable Modification Program (HAMP) that has so far rejected and pushed more applicants closer to foreclosure (436,053) than it has helped through permanent modifications (346,816).
“Over the course of five hearings of the House Committee on Oversight and Government Reform, we have heard bipartisan, near-universal acknowledgement from every observer outside the Treasury Department that this massive government intervention is simply not working,” wrote Issa and Jordan is a letter to Treasury Secretary Timothy Geithner. “The evidence of HAMP’s failure is overwhelming, and it points to only one conclusion: the program should end immediately.”
In 2009, President Obama predicted that HAMP would allow 3 to 4 million homeowners modify the terms of their mortgages to avoid foreclosure but the program has fallen far short of this goal. Independent investigations by the Government Accountability Office (GAO) and the TARP IG have found that the Treasury Department has poorly managed the failing program.
Moreover, mortgage servicers recently testified that most, if not all, of the borrowers who received modifications funded in part by taxpayers through HAMP would have qualified for modifications through the servicers’ private programs if HAMP did not exist. Even many of the homeowners who were kicked out of HAMP received assistance from the servicers’ private programs. According to Treasury data, almost half of the borrowers kicked out of HAMP were able to receive assistance through an “alternative modification.” Under HAMP, taxpayers forced to continue funding a program that squanders theirmoney by providing incentives to banks to modify mortgages that they would have modified anyway.