Obama had lofty goals of helping 4 million Americans keep their homes with his Home Affordable Mortgage Program (HAMP).
Here are some quick facts:
- HAMP modified 1.2 million mortgages (70% less than the target)
- 306,000 re-defaults
- Another 88,000 at risk
- The re-default rate is an alarming 30%
- The re-default rate of those in since 2009 is 46%
CNNMoney has additional details in Watchdog: Borrowers in Obama housing program re-defaulting.
Borrowers who received help through the government’s main foreclosure prevention program are re-defaulting on their mortgages at alarming rates, a federal watchdog said in a report released Wednesday.
Nearly 1.2 million mortgage modifications have been completed since the Home Affordable Modification Program (HAMP) was first launched four years ago. Yet more than 306,000 borrowers have re-defaulted on their loans and more than 88,000 are at risk of following suit, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) found in its quarterly report to Congress.
In addition, the watchdog found that the longer a homeowner stays in the HAMP modification program, the more likely they are to default. Those who have been in the program since 2009, are re-defaulting at a rate of 46%, the inspector general found.
HAMP is certainly a failure compared to stated goals. However, as government programs go, it’s easy to make a case that HAMP was a tremendous success.
Here’s why. “As part of the Troubled Asset Relief Program, Treasury allocated $19.1 billion to the HAMP program. So far, it has spent $4.4 billion“.
The typical government program wastes far more than initially allocated. This government program only wasted $4.4 billion out of a projected waste of $19.1 billion.
It does not get much better than this!
Unfortunately, there is still a big push to waste more money.
Christy Romero, the head of SIGTARP says “Treasury pulled out all the stops for the banks, they should do the same for homeowners“.
This same “two wrongs make a right” genius also says “Treasury needs to research why so many borrowers are dropping out of the program.”
What’s to research? People are underwater in their homes (still), without a job, or struggling in minimum wage part-time jobs. But hey, give a bureaucrat money to waste and they will.
Mike “Mish” Shedlock