The program that was supposed to help millions of Americans gain relief from their mortgage payments has turned out to assist considerably fewer in number—while causing many to lose their homes altogether.

 

The Home Affordable Modification Program (HAMP), run by the U.S. Department of the Treasury, was launched with the goal of modifying the mortgage payments of 3 million Americans. But to date only 1.4 million have even tried to qualify for the program and of those only 550,000 were accepted.

 

For those who were rejected, life got really difficult. While awaiting a decision on their application, these homeowners enjoyed temporary cuts in their monthly payments to their banks. But once notified that they did not qualify, this group of 900,000 borrowers was hit with huge bills for the difference that was not paid towards their mortgages. The money owed often led to foreclosure.

 

“This program has hurt people,” said Neil Barofsky, the inspector general of the Troubled Asset Relief Program, which oversaw HAMP. “It’s heartbreaking.”

 

He added, “While Treasury continues its astonishing silence by refusing to provide an estimate, goal, or projection of the total number of permanent modifications it expects to complete and maintain, in December 2010, the Congressional Oversight Panel (‘COP’) estimated that, if current trends hold, HAMP will result in only 700,000 to 800,000 effective permanent modifications. Unfortunately, COP’s dispiriting projection appears all too reasonable, with participation trends getting worse and worse with each passing quarter.”

-Noel Brinkerhoff, David Wallechisnky

 

Treasury Dept. Anti-Foreclosure Program “Abysmal,” Says Watchdog (by David Heath, Center for Public Integrity)

Statement of Neil Barofsky (Special Inspector General Troubled Asset Relief Program) (pdf)

Govt’s Loan Mod Program Crippled by Lax Oversight and Deference to Banks (by Paul Kiel and Olga Pierce, ProPublica)