Bailout official labels mortgage modification program a failure
The Inspector General of government bailout programs has labeled the mortgage modification program a failure. Neal Barofsky, appointed to oversee the bailout programs including the Home Affordable Modification Program, blasted the program in a Congressional hearing for being ineffective. More than half a million applicants have gotten their mortgages modified.
Mortgage modification program blasted in hearing
Recently, there was a joint Congressional hearing about whether certain programs in government bailouts had been effective, including the mortgage modification program. The program, which was nicknamed Make Home Affordable, but titled the Home Affordable Modification Program or HAMP, was blasted in the hearing as “a failure,” according to USA Today. Neil Barofsky was appointed as a special Inspector General in charge of bailout programs and funding and told the Congressional oversight committee that the mortgage modification program was not working. He went on to say that an increasing number of people will continue to want the program canceled, “and understandably so.” However, some have pointed to slow moving loan lenders as being part of the cause of the program’s problems.
Call to repeal HAMP
An increasing number of people are calling for the HAMP program to be cut. On the same day that the oversight committee met, three House Republicans submitted a bill that would end the HAMP program. Doing so would cut $30 billion from unused funding for bailout emergency loans. HAMP was intended to help 3 million to 4 million people avoid foreclosure by modifying existing loans with loan companies, but only 549,620 mortgages have been successfully modified. However, the cash advances lent to banks, more than $341 billion, have been viewed as very successful.
Foreclosures still epidemic
The rate of foreclosure has started to fall in the worst hit areas, especially states like Arizona with higher than normal real estate values, according to CNN. Las Vegas, the worst hit city in the United States, has seen the rate of foreclosure fall by 7 percent over the last year, but one in nine homes there has been in some form of foreclosure activity. However, in a survey of more than 200 metro areas by RealtyTrac, the overall foreclosure rate rose by 72 percent in 2010.