Obama Loan-Modification Effort ‘Failed Miserably,’ Panel Says
March 25, 2010, 2:44 PM EDT
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By Dawn Kopecki
March 25 (Bloomberg) -- President Barack Obama’s main foreclosure-prevention program is a failed effort that may be doing more harm than good by spreading the housing crisis over several years, lawmakers and a U.S. watchdog said today.
“It has failed and it has failed miserably,” said Representative Jackie Speier, a California Democrat, said at a House Oversight and Government Reform committee hearing on the Home Affordable Modification Program. “Unfortunately we are incapable of saying that it was a failure, it was an experiment, it didn’t work, let’s try something else.”
The HAMP program, which Obama said would keep as many as 4 million borrowers from losing their homes came under fire from Republicans and Democrats at today’s hearing after a report said only a fraction of that number has received long-term help.
Treasury officials privately estimate HAMP will lead to permanent modifications for 1.5 million to 2 million homeowners, according to the report by Neil Barofsky, the special inspector general for the Troubled Asset Relief Program who testified at the hearing, as did Assistant Treasury Secretary Herb Allison.
“The evidence is clear: HAMP has failed,” said California Representative Darrell Issa, the panel’s ranking Republican. “One year ago, the administration told 4 million American homeowners that the Treasury Department would help them keep their homes. As of last month, the program had underperformed the administration’s projections by almost 96 percent.”
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