RealEstateEconomyWatch.com

Letter_Issa_Jordan_to_Geithner_100316.pdf

This week two influential House Republicans introduced a partisan flavor to the government’s efforts to reduce foreclosures by taking the Obama Administration to task for “misstating accomplishments” of its Home Affordable Modification Program and “trying to confuse the American people.”

 Congressmen Darrell Issa (R-Calif.) and Jim Jordan (R-Ohio) said in a letter to Treasury Secretary Geithner that Treasury’s most recent report on the HAMP program counts temporary modifications as permanent ones in order to show the program is 34-45 percent of the way towards achieving the goal of helping 3-4 homeowners modify their mortgages. 

“These statements are not honest.  HAMP’s true goal, as Treasury initially described it, was 3 to 4 million permanent-not temporary-modifications. It glossed over disappointing results and painted a rosy picture of a failed program,” the Republicans wrote Geithner.  The HAMP program, which launched last March, has claimed only 170,207 permanent modifications.

The Congressmen said temporary modifications that do not become permanent may actually harm homeowners, who are worse off because the money they spend on monthly mortgage payments could have gone towards moving into a new home.

“Foreclosures hit an all-time high in February, but that fact is nowhere admitted in the February report,” they said.

The partisan attack on the program is the most public indication to date that the HAMP program may become a political liability for the Administration.  After the 2008 election, the Bush Administration’s $3.9 billion Hope for Homeowners program, which was intended to help 400,000 borrowers avoid foreclosure but it attracted only 312 applications in ten weeks, led to a contentious exchange of words between Rep. Barney Frank (D-Mass.) and then-HUD Secretary Steve Preston.

For a copy of the congressmen’s letter, click on the link at the top of the story.