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Government Oversight Panel Reviews HAMP Program

The Congressional Oversight Panel released its fourth housing report regarding the Obama administration's Home Affordable Modification Program (HAMP). The report indicates that the Treasury Department has failed to properly analyze the program.

The congressional watchdog report says the program has succeeded in stopping foreclosure in some cases, but "will never have the reach necessary to put an appreciable dent into the foreclosure crisis." The Treasury Department originally set a goal of preventing 3 to 4 million foreclosures. The report says the Treasury has reduced its goal a number of times. The panel estimates the HAMP program will prevent 700,000 to 800,000 foreclosures, a small number when compared to the 8 million to 13 million foreclosures expected by 2012.

The oversight panel report says that it is nearly impossible to gauge the success of the program by both the overseers and the public. Panel Chairman Senator Ted Kaufman says Treasury should come forward with what they think the real objectives of the program are right now."

The oversight panel report says the government should hold the financial institutions administering mortgages accountable. Treasury should withhold or disgorge incentive payments under the program in cases where the banks fail to properly complete loan modifications. Banks and mortgage services have recently come under fire for proceeding with foreclosures during a modification process, using a dual track system. The oversight panel report says banks also simply lose paperwork during loan modifications without accountability.

The report, released on Tuesday, says Treasury should monitor cases. Treasury could intervene when homeowners fall behind on their payments during the loan modification process. The Congressional Oversight Panel was created in 2008 to oversee Treasury's $700 billion rescue program that includes the HAMP program.

Source: Associated Press, "Govt anti-foreclosure program needs goals: panel," 14 Dec 2010

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