ABC News’ Matthew Jaffe reports:
In the spring of 2009 the Obama administration unveiled a program that they said would help 3 to 4 million struggling homeowners avoid foreclosure, but to date the plan has fallen so far short that non-partisan government watchdogs are blasting it and House Republicans are trying to do away with it altogether.
The Home Affordable Modification Program – known as HAMP – has only helped around 540,000 borrowers receive permanent loan modifications to enable them to stay in their homes. By comparison, over 800,000 homeowners have dropped out of the program.
On Capitol Hill, the program has become a lightning rod for criticism. Today a government watchdog ripped the plan before a House subcommittee.
Neil Barofsky, the outgoing Special Inspector General for TARP (SIGTARP), said the program “continues to fall woefully short of meeting its original expectations” and there is now “near universal agreement that the program has failed.”
“HAMP has been beset by problems from the outset and, despite frequent retooling, continues to fall woefully short of meeting its original expectations,” Barofsky said in prepared testimony for a House subcommittee hearing. “Today the program is under siege from all quarters, with near universal agreement that the program has failed to meet its goals, and the current debate centering mostly on whether the program should be terminated, replaced or revamped. Treasury, it seems, stands alone in defending the status quo.”
That will only be fuel for the fire of House Republicans, who have unveiled a bill to end the program before it expires at the end of next year, contending that it is wasting tens of billions of taxpayer dollars.
While Treasury has acknowledged that the program will not meet its stated goal of keeping 3 to 4 million homeowners in their homes, they have argued that is still helping some 25,000 to 30,000 borrowers every month, so getting rid of it would hurt the housing market.
“It would cause a huge amount of damage to a very fragile housing market and leave hundreds and hundreds of thousands, if not millions, of Americans without the chance to take advantage of a mortgage modification that would allow them to stay in a home they can afford,” Treasury Secretary Tim Geithner told a House hearing yesterday.
But that may not be enough to stop Republicans from pulling the plug on it.