Report finds HAMP program to be lacking

December 14, 2010 04:17PM

A government evaluation of the Home Affordable Modification Program found it once again to be lacking, according to CNN. HAMP has undergone tweaks since it was introduced in April, but in a recent report, the Congressional Oversight Panel found little improvement in its performance. Instead of helping close to 4 million struggling mortgage borrowers keep their homes, HAMP will prevent only about 700,000 to 800,000 foreclosures. “I think the program has turned out to be a lot smaller and have a lot less impact than we thought it would,” said Ted Kaufman, the former U.S. senator from Delaware who is now chairman of the Congressional Oversight Panel. Since the Treasury Department lost the authority to further restructure the program at the end of October, banks are now offering more modifications through their own process rather than through the government’s. Among the reasons cited in the report for the program’s failure were that servicers were preventing or delaying modifications, and that many loans in trouble often came burdened with second mortgages, causing many banks to refuse to sign off unless they were paid. [CNN]