The two most vocal Republican critics of President Obama’s foreclosure prevention program told U.S. Treasury Secretary Timothy Geithner in a letter that its mortgage modification reports were overstating results, shifting its initially stated goal and applying “spin over substance.”
Rep. Darrell Issa, R-California, ranking member of the Oversight and Government Reform Committee, and Rep. Jim Jordan, R-Ohio, ranking member of the Domestic Policy Subcommittee, wrote the letter to Geithner, dated March 16, 2010.
They focused on Treasury’s monthly update for February of the one-year-old, $75 billion Home Affordable Modification Program, HAMP, which was released last week.
”Treasury’s determination to change the goals of the program mid-implementation is not the only way in which Treasury has resorted to using spin over substance,” wrote Issa and Jordan. “The February report touts a 32 percent conversion rate from temporary to permanent modifications, but does not provide the proper context for that rate.”
With about 170,000 borrowers getting permanent modifications, HAMP’s true conversion rate is “about 4-6% of the target of 3-4 million” distressed homeowners, the Republican lawmakers said.
The Treasury’s February report stated that “more than 1.3 million homeowners have received offers for trial modifications, representing 34-45 percent toward the goal of 3-4 million offers extended through 2012.”
Issa and Jordan told Geithner that this represents a shift away from the original goal at the time of the program’s launch a year ago.
“Rather than acknowledge the program’s failure, Treasury is trying to confuse the American people by counting HAMP’s higher number of temporary modifications – fewer than one-third of which are successfully converting to permanent ones – toward the goal,” their letter states.
Bloomberg reported that Treasury spokeswoman Meg Reilly said HAMP’s goal has “always been for offers extended to borrowers … This has been misreported for the past year and, while we have done our best to clarify for the public, the goal post has never moved.”
A Treasury Department description of HAMP, dated March 4, 2009 and available on Treasury’s website, describes the program as “a loan modification plan to reach up to 3 to 4 million homeowners.”
In their letter, the two lawmakers noted that in recent congressional testimony before the House Domestic Policy subcommittee, a top HAMP administrator insisted that the goal was always to provide an “opportunity” to the eligible pool of borrowers. Phyllis Caldwell, chief of Treasury’s Homeownership Preservation Office, said HAMP was “designed to offer three to four (million) homeowners an opportunity for a mortgage modification – not a permanent modification, an opportunity.”
“These statements are not honest,” the lawmakers said. “HAMP’s true goal, as Treasury initially described, was 3 to 4 million permanent – not temporary – modifications.”
First off if Obama wants to stem foreclosures he needs to push one thing and one thing only – Jobs. If the President and the Congress would devote themselves to creating jobs in this Country the same way they devoted themselves to Heath Care there would be a recovery. I think that it is wrong for the Government to be involved in foreclosure cases as they have tried to do with HAMP and HARP when these programs do not work. Besides Foreclosure is a civil matter and should be free of government involvement. I live in a State (Florida) that already has foreclosure relief for defaulting borrowers and its called the Judicial Process! a defaulting borrower can live rent free for as many as 12 months before even going to Court. If they cannot fix their problems with the contract that THEY signed and KNEW the consequences of a default why should the American Tax Payer have to assist in these new government incentives to banks to make modifications?
I agree that its frustrating to think that tax payer money is going to bail out people in fear of foreclosure…. but that’s the point of taxes. You aren’t going to get your taxes back just cause the gov’t doesn’t use it… they’ll find an even more “useless” way to spend it.. like a study to determine the reason why it’s so expensive to conduct a study. (ha!)
Regardless, the government is trying to save millions of people from becoming homeless. YES, they should have to be responsible for their actions, YES they should have to repay it back, and YES they WILL. these modifications only push the loan difference off till a later term period while modifying a lower interest rate for the time being. These people aren’t getting a free ride, their just getting help lowering their interest rates so they can accommodate for unexpected problems – like being sick, unemployed, etc.
I’ve read about countless fake programs being instituted after HAMP and they take advantage of ppl – so that should be another source of concern for people. If their worrying about HAMP AND being ripped off, you can’t trust anyone. I read an article on AOL’s housing watch ( and also featured in the Sun-Sentinel & Palm Beach Post ) about a company – freehampreport.com – that helps, legitimately, with HAMP loan mods! They should get Obama’s seal of approval!
Would you rather a country filled with 3-4million more homeless people … or have your already gone tax money go to help the people that it’s intended to help. REMEMBER, you HAVE to have paid taxes, held jobs, be a US citizen, etc. to receive this aid… this isn’t for illegal that don’t work and need a loan mod. You have to have contributed to the system just like you or me. and what you YOU want to have done for you if you lost your job and worried about your house going into foreclosure? It’s easy to judge others till you walk a mile in their shoes!