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FDL: Treasury Tries to Defend HAMP at COP Hearing

26 Jan

Hmm… The facts still look the same from here. Massive failures on all fronts j- HAMP creates an incentive to foreclose… Doesn’t seem to work for homeowners… and the bickering goes on as claims that ‘we are making progress’ fall out into the general noise like so much after the lost game cheerleading.
Oh, and that pesky broken title thing. and that pesky servicer thing…

Treasury Tries Defending HAMP at House Oversight Hearing

By: David Dayen Wednesday January 26, 2011 8:44 am

The House Oversight Committee is holding its first hearing since Darrell Issa got the gavel today, and it’s on TARP and foreclosures. And that bifurcation is accurate – the Republicans on the panel, for the most part, are asking about TARP, and the Democrats are asking about foreclosures. Timothy Massad of the Treasury Department (filling in for Treasury Secretary Geithner, who declined to participate) and SIGTARP (Special Inspector General for TARP) Neil Barofsky are appearing before the committee.

The backdrop for this is a new SIGTARP quarterly report and some new statistics on HAMP from the Treasury Department, showing another 30,000 getting a permanent modification while 58,000 fall out of the program and have their modifications. In his quarterly report, Barofsky said that HAMP “continues to fall short of any standard of success” and highlighted that the program is now expected to spend only $12 billion out of the $50 billion allocated through TARP.

Today, HAMP appears to be under siege, with a chorus of criticisms from all points on the ideological spectrum growing more insistent and calls for termination or a dramatic restructuring gaining traction. The numbers are remarkably discouraging. According to RealtyTrac data, a record 2.9 million homes received foreclosure filings in 2010, up from 2.8 million in 2009, and 2.3 million in 2008. RealtyTrac predicts that filings will be 20% higher in 2011, crossing the 3 million threshold. Similarly, the firm’s data reveal that bank repossessions continue to increase, from just under 820,000 in 2008 to over 918,000 in 2009 to 1.05 million in 2010.

In contrast, the number of permanent mortgage modifications under HAMP remains anemic — there were just under 522,000 ongoing permanent modifications as of December 31, 2010, with approximately 238,000 of those funded by and attributable to TARP. The remaining were funded outside of TARP by the GSEs. A combined total of more than 792,000 trial and permanent modifications have been cancelled, with more than 152,000 trial modifications still in limbo. These permanent modification numbers pale in comparison not only to foreclosure filings, but also to Treasury’s initial prediction that HAMP would “help up to 3 to 4 million at-risk homeowners avoid foreclosure” “by reducing monthly payments to sustainable levels.”

Read the Rest of the Article at FDL

 

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  1. Jim Collins

    January 29, 2011 at 12:15 pm

    The only real question is: What has taken Congress so long to realize that HAMP is a failure. Every report from the Congressional Oversite Panel has shown that HAMP is failing badly, mostly due to Treasury’s abysmally poor management of it.
    Now Rep. Issa and the oversight committee are “looking” again. Let’s take some action here and either kill it or fix it so it works -mostly that will require holding the banks’ feet to the fire as they are the main culprits here.