O'bama's HAMP Initiative Struggling to Help Homeowners
September 21, 2016
A government auditor has warned that the U.S. Treasury Department doesn’t understand why distressed homeowners are re-defaulting at an “alarming” rate on government-aided mortgages, costing taxpayers more than $800 million and renewing questions over the administration’s efforts to help troubled borrowers.
The troubling report by the Special Inspector General for the Troubled Asset Relief Program, or SIGTARP, comes as President Barack Obama is set to deliver Wednesday what aides describe as a major address on the economy and the middle class. By detailing the administration’s shortcomings in aiding homeowners, the report may undercut Obama’s message.
The Home Affordable Modification Program -- the White House’s signature effort to assist struggling borrowers in the wake of the financial crisis and Great Recession -- was initially promised to help up to 4 million homeowners avoid foreclosure. Through May, fewer than 880,000 borrowers were making payments on their new HAMP mortgages. The $50 billion commitment to the program has shrunk to about $38 billion. Less than $9 billion has been spent so far on housing programs under the bank bailout program known as TARP.
The initiative has languished as mortgage companies have struggled to handle applications for loan modifications and subsequently service homeowners, and Treasury has stumbled in overseeing the companies and setting consistent policies. Despite the humbling results, Treasury officials have consistently argued that homeowners entering the program stood a better shot than most at keeping their homes, thanks to the effective cap on their new monthly loan payments relative to their income.
Read the entire report at Huffingtonpost here: