WASHINGTON (Reuters) – The Obama administration is facing stepped up pressure to provide more details about its efforts to help struggling homeowners stay in their homes.
U.S. Treasury Secretary Timothy Geithner earlier this month said about half a million American families are now participating in a home loan modification program initiated by the Obama administration to try to slow the rate of foreclosures.
“But the measure of success for the Home Affordable Mortgage Program (HAMP) is not only the number of borrowers who enter the process,” said New York Bank Superintendent Richard Neiman, a member of the Congressional Oversight Panel (COP) which oversees the government’s Troubled Asset Relief Program (TARP), the $700 billion bailout launched under the Bush administration.
“The real test is the number of families who complete the trial modification period and receive sustainable permanent modifications,” Neiman said in a prepared statement released Thursday after Treasury Assistant Secretary for Financial Stability Herbert Allison testified Thursday before the COP.
And Rep. Maxine Waters, a California Democrat who chairs the House Financial Services Subcommittee on Housing and Community Opportunity, wants Geithner to send her detailed — down to each congressional district – information about how many trial modifications have been converted into permanent modifications.
“Several issues continue to exist within the HAMP program, including the need for increased (loan) servicer participation and knowledge about the program and additional homeowner outreach,” Waters wrote in an October 21 letter released Thursday and co-signed by Rep. Kathy Castor, a Florida Democrat. Waters wants an answer by next Wednesday.
The pressure comes just two weeks after a COP report found that government programs to fight the U.S. home foreclosure crisis look increasingly inadequate and should be reworked, expanded and supplemented with new ideas.
With a foreclosure filing occurring every 13 seconds, the United States is mired in a housing slump that is destroying billions of dollars in property values and threatening to choke off the economy’s recovery from a stubborn recession.
Federal Reserve Board Chairman Ben Bernanke attended a Consumer Advisory Council Meeting Thursday at the central bank’s headquarters, where consumer advocates pressed the Fed for better protections for consumers seeking mortgages and credit cards.
Bernanke made no substantive comments during his 90 minute appearance at the beginning of the three and a half hour meeting that included a discussion of credit card regulations and disclosure requirements for mortgage originators. The Fed chief left the room before the discussion turned to foreclosure issues.
It increasingly appears that HAMP, which reduces monthly mortgage payments to help borrowers who are facing foreclosure keep their homes, is not equipped to deal with the changing nature of the housing crisis, the October 9 COP report said.
The government’s other effort to stem foreclosures, the Home Affordable Refinance Program, or HARP, helps homeowners who are current on their mortgages but owe more than their homes are worth, get more affordable loans.
As of September 1, the watchdog report said, HAMP had helped arrange 1,711 permanent mortgage modifications, with an additional 362,348 borrowers in a three-month trial stage. HARP has closed 95,729 mortgage refinancings, it said.
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Article courtesy of: Reuters
