We drew up a report about the Obama Administration’s ‘Home Affordable Modifications Program‘ (HAMP) in early August this year, in which we looked at news stories and even the government’s own figures that demonstrated the slow start, and middle stretch, the program was having. The program was meant to offer those who were behind on payments, but with a history of good-faith compliance on their mortgage, a chance to have a three-month trial period of a notably reduced mortgage payment. If/when that period was successfully completed, the mortgage owner would receive a refinanced mortgage with lower monthly payments for up to five years.
An economic quarter later, and the news for homeowners is still not good. Economists are poking holes in the program, and – unlike in August – the knives of political opposition have been sharpened as well.
Last week, the Congressional Oversight Panel of the Treasury called the program and the administration to task. Even if HAMP helped the people in the program as it was ideally designed to do, the number of avoided foreclosures “will never have the reach necessary to put an appreciable dent into the foreclosure crisis.” (Visions of sugar plums dancing in your head keeping you awake? Read the full report.)
The upshot of the report states that HAMP itself is a lost cause. Nevertheless, some effort can still be made by Treasury to wring out as much benefit as can be salvaged:
It is too late for Treasury to revamp its foreclosure prevention strategy, but Treasury can still take steps to wring every possible benefit from its programs. Treasury should enable borrowers to apply for loan modifications more easily — for example, by allowing online applications. Treasury should also carefully monitor and, where appropriate, intervene in cases in which borrowers are falling behind on their HAMP-modified mortgages.
Establish a way to apply online?! Did the Tardis whisk us back to 1987?! To print the paper required to mail out to the people who needed the mortgage adjustment must have put the program in the red before one citizen put pen to paper.
Conservatives have been quick to jump on the news, like Ron Paul. But then so have liberals, like Shahien Nasiripour of TheHuffingtonPost.com:
Twenty-eight homeowners who entered the program in March 2009, or more than a year-and-a-half ago, remain in the trial phase. Some 475 have been in trial limbo for 18 months. More than 29,100 borrowers have been stuck in the trial phase for at least a year, data through October show.
I know it’s the holiday season and all. And I posted a rejoinder on Monday that it is the season to reach out to our fellow citizens and philanthropists, even if we wish they would donate their money to our causes. But really. What is 29,100 mortgage adjustments – even if they were heading toward refinancing as advertised – in the face of the three-plus million homes still in or on the brink of foreclosure? Why could we not have bailed out only .0097 percent of the big banks’ debts? Sure would have kept the national debt in check.
The political fallout from this lame-duck session of Congress is unlikely to be beneficial to the Obama Administration or the Democrats. Support or lament the passage of START, the end of ‘Don’t-Ask-Don’t-Tell,’ or financial support for 9-11 first-responders (How the hell did that take a decade to get worked out?!)… The fact is, each of these important issues affect a fairly small and definable segment of the voting population. But homeowners? That’s an awfully big voting block that has been given coal for Christmas.
