Modifications,Short Sales,Deeds in Lieu,WriteDowns

Obama Administration Issues Veto Threat Against Bill to End Controversial HAMP Housing Program

Posted on Sunday, March 20, 2011

President Obama would be urged to veto the House Republican bill that would kill his administration’s underperforming housing assistance program and replace it with a new program, a statement from the Office of Management and Budget said this afternoon.
“The Administration strongly opposes House passage of H.R. 839, which would eliminate the Department of the Treasury’s Home Affordable Modification Program (HAMP),” read a statement of administration policy issued Tuesday afternoon. “As tens of thousands of responsible American homeowners struggling with their mortgages receive permanent assistance each month from HAMP, the Administration believes that continuation of HAMP is important to the Nation’s sustained economic recovery. If the President is presented with H.R. 839, his senior advisors would recommend that he veto the bill.” (Underlining in original)
In February 2009, President Obama said HAMP would help 3 or 4 million American renegotiate the terms of their mortgages. Two years later, the program has permanently renegotiated the loans of approximately 540,000 Americans. Approximately 1.5 million Americans have received temporary modifications – but more than 800,000 of them have been cancelled.
Rep. George Miller, D-Calif., recently called HAMP “an arbitrary, capricious system that kicks hard- working people out on the street. The administration cannot allow this to continue.”
Earlier this month, Neil Barofsky, then the inspector general of TARP program, testified before Congress that HAMP was “clearly a failure,” saying there is “basically universal and bipartisan agreement that the HAMP program is failing to meet TARP's goal of preserving homeownership."
But, Barofsky said, “Secretary Geithner continues to celebrate the status quo…Treasury stands alone in its defense."
The independent investigative journalists at ProPublica recently issued a report noting the failures of the HAMP program, noting that “only a fraction of struggling homeowners are getting help,” that the “largest servicers, especially Bank of America, have left most struggling homeowners in limbo without either modifying or foreclosing,” that just about one in five homeowners who applied for the HAMP program received a permanent modification, and that “HAMP itself hasn't made much difference.”
Earlier this month, Treasury Secretary Tim Geithner told Congress that ending the HAMP program “would cause a huge amount of damage” because the housing market is in such a fragile state. “I would recommend against it.”
-Jake Tapper, ABC NEWS


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