Mortgage modification program deemed a failure
The Home Affordable Modification Program, which was created as way to save homeowners from foreclosure, has underperformed, according to the program’s watchdog.
As a result, Republican members of the House of Representatives have introduced a bill to end the program, which they say could save $30 billion in unspent bailout funds.
Some consumer advocates say the program should be given another chance, as it still needs to sort out problems with the mortgage servicing industry, USA Today reports.
“I agree that the servicer performance has been abysmal and that’s something that we have been trying to fix,” Timothy Massad, the Treasury official in charge of bank bailouts, told USA Today.
Program advocates say major lenders, such as JPMorgan Chase, have hindered the program’s success by not being able to distinguish between foreclosures that are inevitable and ones that are avoidable. JPMorgan has only modified 67,722 polices of the more than 200,000 eligible homeowners to date, the news source says.
HAMP was started with the goal of achieving 3 million to 4 million homeowner mortgage modifications. However, the program has only managed to start 549,620 modifications, leaving many Americans it promised to assist left to struggle with mounting debt and the threat of foreclosure.