Yesterday, we provided an outline of the continuing downward trend of the Home Affordable Modification Program (HAMP) program, as reported in the most recent June Report, issued on July 20, 2010.
On July 21, 2010, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), stated in its Quarterly Report to Congress (Report), that HAMP "continues to struggle to achieve its original stated objective to help millions of homeowners avoid foreclosure 'by reducing monthly payments to sustainable levels.'"
The Report states that the number of homeowners being helped through permanent modifications "remains anemic," with fewer than 400,000 ongoing permanent modifications and HAMP has not put an "appreciable dent" in foreclosure filings. Furthermore, according to the Report and as we also indicated in yesterday's compliance update, the number of trial and permanent modifications that have been canceled substantially "exceeds the number of homeowners helped through permanent modifications."
In a telling statement of fact, the Report unequivocally finds that the Treasury "clings to its prior statements that it plans to offer trial modifications to three to four million homeowners, a measure that the SIGTARP has previously shown to be essentially meaningless," and that its refusal to provide meaningful goals is a "fundamental failure of transparency and accountability."
Finally, the SIGTARP takes the position that the "American people are essentially being asked to shoulder an additional $50 billion of national debt without being told, more than 16 months after the program's announcement, how many people Treasury hopes to actually help stay in their homes as a result of these expenditures, how many people are intended to be helped through other subprograms, and how the program is performing against those expectations and goals."
Without clearly defined standards, opines the SIGTARP, positive comments about HAMP's success are "simply not credible," and leads to a growing "public suspicion" that HAMP is an "outright failure."
It should be noted that of the anticipated $75 billion dollar cost of the Making Home Affordable (MHA) program that commenced on February 18, 2009, $50 billion will be funded through TARP. HAMP is one of the MHA programs.
If you have any questions about this matter or would like assistance with mortgage compliance, please contact Jonathan Foxx, Managing Director or call 516-442-3456 x 100.
As of June 30, 2010, a total of 753,275 mortgages are currently being modified, either permanently or on a trial basis. Of those, 389,198 were active permanent modifications and 364,077 were active trial modifications.
SIGTARP uses statements from the June reviews provided by HUD and Treasury to explain why the number of cancellations of mortgage modifications has increased, as decisions on aged trials are being reached, such as:
- Borrowers had mortgage payments already less than 31% of their income or did not occupy the property as their primary residence.
Office of the Special Inspector General
of the Troubled Asset Relief Program
Quarterly Report to Congress
July 21, 2010