Home > Foreclosure alternatives > Has HAMP “Struck Out Looking?”

Has HAMP “Struck Out Looking?”

The Federal Government's HAMP program seems to be coming up short.

It’s World Series time, even though our local teams didn’t make it this year, so this baseball analogy on DSNews.com caught my eye.

And Sen. Ted Kaufman used another baseball analogy at a hearing where he pointed out a key defect in the Home Affordable Modification Program.

“What matters is not how often you swing the bat, but how often you reach the bases,” said Kaufman (D-Delaware), who now chairs the Congressional Oversight Panel (COP), which is charged with policing initiatives that fall under the Troubled Asset Relief Program (TARP), including the Treasury’s foreclosure-prevention efforts.

When HAMP was launched in February, 2009, President Obama said the program’s goal was to help 3 to 4 million home owners. Now, 18 months later, there are less than 500,000 permanent modifications under the HAMP program, and Kaufman says “as many as half of these borrowers will ultimately redefault and lose their homes.”

“At the rate that homeowners are falling through these cracks today, three million modification offers may translate into only a few hundred thousand foreclosures prevented,” Kaufman said.

As that goal has appeared farther and farther out of reach, Treasury has redefined its aim, Kaufman said, and now says the purpose is to offer a temporary mortgage modification to three to four million homeowners.

And Alan White, a law professor at Valparaiso University, told ProPublica.org that the problem isn’t the rate at which homeowners are redefaulting, which is low compared to other modifications, but rather the shrinking number of new modifications given out by banks. “We need to be modifying 10 times as many a month,” he said.

Across the country, over 5 million mortgages are more than 60 days overdue or in foreclosure, according to Lender Processing Services.

A report like this hits home here in Bergen County. According to Federal Reserve statistics, the nation’s 90 day delinquency rate is 1.7% above last year, while Bergen County is running 2.2% above last year.  So with more and more people falling behind on their mortgages, it seems that HAMP modifications are not going to be the answer.

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