Inspector General Takes Treasury to Task
Neal Barofsky, the special inspector general for the troubled asset relief program, has written a highly critical evaluation of the U.S. Treasury's administration of efforts meant to help home owners remain in their homes.
The Obama administration launched the Home Affordable Modification Program in 2009. The program was meant to help homeowners who were having trouble making their mortgage payments modify their mortgage contracts to be able to make the payments. The program has suffered delays and difficulties almost from its very beginnings.
"While it may be true that may homeowners may benefit from temporarily reduced payments even though the modification ultimately fails," Barofsky wrote in the most recent quarterly report to Congress, "Treasury's claim that 'every single person' who participates in HAMP gets 'a significant benefit' is either hopelessly out of touch with the real harm that has been inflicted on many families or it's a cynical attempt to define failure as success. Worse, Treasury's apparent belief that all failed trial modifications are successes may preclude it from seeking to make the meaningful changes necessary to provide the 'sustainable' mortgage relief for families it first promised."
Barofsky included a collection of correspondence his office received regarding HAMP to illustrate his criticism.
"I entered into an agreement with [my servicer] through the Making Home Affordable program in April 2009," wrote a homeowner to Barofsky's office. "I have made every payment on time; that, they said, would result in the modification becoming permanent after six months. They have had us...submit the same paperwork seven times in the last two years. Now they have, in their words, 'decided not to go forward' and put a notice on the house for a sheriff's sale...a negotiator (who has never contacted me) made the decision to stop the modification with no reason as to why."