Senators Jim DeMint (R-SC), Bob Corker (R-TN) and Tom Coburn (R-OK) today introduced legislation that would “end the Housing Affordable Modification Program (HAMP),” according to a joint press release.
The program was intended to help over 7 million homeowners modify their mortgages to avoid foreclosure. Instead, HAMP has only permanently modified just over half a million loans while leaving thousands Americans worse off. A record 2.9 million homes were foreclosed on in 2010 with a projected 20% increase expected in 2011. In contrast, the Financial Services Roundtable reports that the private sector has completed nearly 9.8 million mortgage modifications since 2007, and over 1.2 million in 2010 alone.
Special Inspector General for the Troubled Asset Relief Program Neil Barofsky harshly criticized HAMP in Congressional testimony on March 2 stating that the program’s “failed trial modifications often leave borrowers with more principal outstanding on their loans, less home equity, depleted savings, and worse credit scores.” SIG Barofsky went on to say there is “near universal agreement that the program has failed to meet its goals” and concluded “there is little reason to hope things will get better.”
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