Evidence continues to mount against President Obama’s Home Affordable Modification Program. The ranking member of the House Committee on Oversight and Government Reform, Rep. Daryl Issa, R-Calif., just released a damning press release that breaks down what’s going on with the program:
* The number of homeowners kicked out of HAMP continues to outpace the numbers who receive permanent mortgage modifications – at an increasing rate. In June, 91,118 homeowners were kicked out of temporary modifications and 2,466 homeowners were kicked out of permanent modifications. The difference between homeowners who have lost their modifications (now, cumulatively, 529,637 (520,814 temporary modifications canceled plus 8,823 permanent modifications canceled)) and homeowners who have successfully achieved permanent modifications (now, cumulatively, 389,198) is even starker than it was last month.
* Treasury has long been trying to represent that its original goal of “sustainable” relief to 3-4 million homeowners merely meant that 3-4 million homeowners would receive offers of temporary modifications. The latest numbers suggest that Treasury will not even hit that lesser goal. The number of offers of temporary modifications stands at 1,528,563. Even Treasury’s revised goal – which SIGTARP and others have criticized as meaningless – appears to be out of reach.
* HAMP’s mortgage modification pipeline is slowing down. In June, only about 15,000 homeowners started new temporary modifications – the smallest number since recordkeeping began.
* The Administration falsely compares foreclosure rates with cumulative temporary mortgage modifications. Page 3 of the Housing Scorecard contains a chart which purports to show exactly that by comparing cumulative mortgage restructurings to cumulative foreclosure completions. The Scorecard chart dishonestly includes temporary mortgage modifications under HAMP in the total number of mortgage restructurings. As we’ve seen, most HAMP temporary mortgage modifications don’t stick. A large number of temporary mortgage modifications is irrelevant to the foreclosure rate unless those temporary modifications are being converted to permanent ones successfully – which is not happening.
The $75 billion program was supposed to help three to four million distressed homeowners, but it has not fared well in evaluations by the Government Accounting Office and the Treasury Department’s Inspector-General. Issa has previously called for the program to be ended on the grounds that it is being mismanged.