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New Govt. Report Details HAMP Failures
The US government's efforts to turnaround the nation's struggling market have been widely criticized over the last few years, with most of that criticism directed at the Home Affordable Modification Program, or HAMP. The program was introduced in 2009 to help homeowners modify their mortgages and avoid foreclosure, but has been rather ineffective. A new report from the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) issued a report Monday that details the failures of HAMP.
The report shows that the program, which was funded with $45.6 billion to assist homeowners, has only spent $2.5 billion. That is just over 5 percent of the total amount set aside to help troubled borrowers modify their loans and keep their homes, and well short of the goals set out by Congress and the White House when the program was started. With the program set to expire late next year, it's rather unlikely that the program will reach its goals. According to the SIGTARP report, the program will likely fall short of the goals set out for it by at least 600,000 homeowners, meaning that a large portion of those could end up losing their homes.
The SIGTARP findings do offer a silver lining, saying that there is still time for the HAMP program to pick up the pace and help more Americans get modifications, but the Treasury Department and 112 participating mortgage servicers will have to improve their coordination in order for that to happen. Poor written communication between servicers and HAMP officials, the SIGTARP report says, has been one of the biggest barriers to the program actually helping people.