Congressional Panel Faults Slow Progress of Mortgage Modification Program
The Obama administration's program to help people avoid foreclosures is on track to only help between 700,0000 and 800,000 homeowners and not the 3 million to 4 million that officials targeted, a Congressional panel concluded in a report released today.
The report by the Congressional Oversight Panel concluded that the Home Affordable Modification Program made economic sense but was hampered by the complexity of mortgages.
"A major reason is that mortgages are, in practice, far more complicated than a one-to-one relationship between borrower and lender,'' the report concludes. "Another major obstacle is that many borrowers have second mortgages from lenders who may stand to profit by blocking the modification of the first mortgage.''
The Obama administration has projected that by the end of 2012 there may have been as many as 8 million to 13 million foreclosures.
The report also concluded that the Treasury Department has done an inadequate job of collecting and analyzing data on the program and lacks the capacity collect data on HAMP's add-on programs.
The COP was set up as part of the 2008 law passed by Congress at the height of the financial crisis aimed at helping troubled financial institutions and consumers. It is the law that set up the Troubled Asset Relief Program. HAMP was set up with $50 billion in TARP funds.
To read the full report, go to: http://cop.senate.gov/reports/library/report-121410-cop.cfm