Former Fannie Exec Batters HAMP as a Failure

By
Thursday, June 24, 2010 at 4:50 pm

Today, Edward Pinto, Fannie Mae’s chief credit officer from 1987 to 1989 and a prominent housing consultant, testified before the House Oversight Committee on the question of whether loan servicers are doing enough to prevent foreclosure and preserve homeownership. His bottom line: The Treasury Department’s Home Affordable Modification Program, or HAMP, has utterly failed at its original goal of modifying three million mortgages and helping to staunch the housing crisis.

Among the harsh points he made: HAMP’s program requirements are so arcane that servicers have trouble complying:

The Treasury Department…promised “clear and consistent loan modification guidelines that the entire mortgage industry can use.” There are only two words to describe HAMP’s guidelines: numbing complexity. At last count HAMP had 800 requirements and servicers are expected to certify compliance. With-ever changing regulations, a constant need to re-evaluate past decisions in light of new regulations, and multiple appeals, it is no wonder that the HAMP pipeline became clogged through no substantial fault of servicers.

Ultimately, the program should help just 6 or 8 percent of the initial target of homeowners:

[In previous testimony I noted] that the then-current HAMP pipeline would likely yield only 250,000 homeowners who would ultimately avoid foreclosure under HAMP — only about 6 percent to 8 percent of the original goal. It now looks like my projection will be pretty close to the mark. HAMP activity has slowed markedly, with the number of new monthly trial modifications declining by two-thirds between December 2009 and May, 2010. The number of new permanent modifications in May 2010 was 30 percent below the April 2010 count. As of May 31, there were 340,000 active permanent modifications. Assuming a 40 percent re-default rate, only 200,000 of these permanent modifications will likely be successful over the long-term. There are another 468,000 active trial modifications. Of these, perhaps only 75,000 will become successful long-term permanent modifications. Discounting all the spin, a slowing HAMP pipeline will yield about 275,000 successful long-term permanent modifications, with perhaps another 100,000 successes resulting from future trial modifications. Today, I reiterate my warning about Treasury’s propensity for applying a rosy gloss.

He also said that HAMP has, perversely, ginned up the number of strategic defaults and simply “extended” the length of the market correction:

HAMP’s flawed design and implementation along with Treasury’s early efforts to “shame and blame” the mortgage servicers promoted strategic defaults, as many borrowers came to expect a modification and blamed their servicer for not getting one. HAMP has also slowed down foreclosure processes, pushing the level of heightened foreclosure activity out to 2013 or 2014 and likely extending the period for the market to correction.

All in all, the hearing today has solidified the view that HAMP has largely failed, and in some cases made the housing crisis worse.

Follow Annie Lowrey on Twitter


Comments

20 Comments

North Capitol Street » Blog Archive » Former Fannie Exec Batters HAMP as a Failure
Pingback posted June 24, 2010 @ 7:34 pm

[...] full post on The Washington Independent Don't miss a single post! Subscribe to my RSS [...]


Genome 10: The hunt for dark matter | MATCH DATING ONLINE ON HERE
Pingback posted June 24, 2010 @ 9:51 pm

[...] Former Fannie Exec Batters HAMP as a Failure « The Washington … [...]


Secret Traffic Exposed » Blog Archive » Failure For Success
Pingback posted June 24, 2010 @ 11:34 pm

[...] Former Fannie Exec Batters HAMP as a Failure « The Washington … [...]


New home loan » Lawmakers slam top mortgage firms on loan mods – Reuters
Pingback posted June 25, 2010 @ 12:17 am

[...] release) Mortgage Servicers Blast Administration's Homeowner Aid ProgramWall Street JournalFormer Fannie Exec Batters HAMP as a FailureThe Washington IndependentThe Atlantic (blog) -Red, White, and Blue Press (blog) -Chicago [...]


Tweets that mention Former Fannie Exec Batters HAMP as a Failure « The Washington Independent -- Topsy.com
Pingback posted June 25, 2010 @ 10:21 am

[...] This post was mentioned on Twitter by C. Santos, Brett Robbins . Brett Robbins said: Former Fannie Exec Batters HAMP as a Failure: The Treasury Department…promised “clear and consistent loan modifica… http://bit.ly/abv5Qx [...]


News about Loan Modification Information issue #1 | Loan Modification Information
Pingback posted June 25, 2010 @ 2:13 pm

[...] practices. Also at the witness table was American Home Mortgage Servicing Inc, more… Former Fannie Exec Batters HAMP as a Failure – The Washington Independent – washingtonindependent.com 06/24/2010 Former Fannie Exec Batters HAMP as a FailureThe [...]


A look back at revenue proposals from the Exec Budget – Albany Times Union (blog) | Sell structured settlements Blog
Pingback posted June 27, 2010 @ 8:57 am

[...] Former Fannie Exec Batters HAMP as the Failure « The Washington … [...]


Loan Modification and Debt Settlement News » Former Fannie Exec Batters HAMP as a Failure
Pingback posted June 29, 2010 @ 10:49 am

[...] View Original Source [...]


Jumping Anaconda » Blog Archive » ‘Deadliest Catch’: Exec on what’s next
Pingback posted June 30, 2010 @ 6:25 am

[...] Former Fannie Exec Batters HAMP as a Failure « The Washington Independent [...]


PHP Freelance Jobs - Work From Home - Online Jobs
Trackback posted July 2, 2010 @ 5:11 am

Some Php Modifications…

I found your entry interesting thus I’ve added a Trackback to it on my weblog :)…


Edwin Jackson Blazes New Trail for Mohawked Athletes in Spinning No-Hitter Against Rays |
Pingback posted July 2, 2010 @ 11:49 am

[...] Former Fannie Exec Batters HAMP &#1072&#1109 a Failure « Th&#1077 Washington … [...]


PHP Freelance Jobs - Work From Home - Online Jobs
Trackback posted July 4, 2010 @ 8:46 pm

Site Login Modifications…

I found your entry interesting thus I’ve added a Trackback to it on my weblog :)…


Shari Posey
Comment posted July 7, 2010 @ 12:49 am

HAMP must have been written by a bunch of bureaucratic idiots. I've read some of the supplemental directives and the supposed answers actually create more questions. For example, many of the directives use the verbage “servicers should do this or that…” rather than “servicers MUST do this or that”. I haven't heard anything about penalties for non-compliance.
I meet homeowners on a daily basis who are entangled in this loan modification vortex. I feel sorry for them because they are led to believe it's a streamlined process when in fact, it is a process from hell. I don't think we will ever learn the truth about how many people were able to stay in their homes or lost their homes in the middle of a “streamlined” modification process.


lachou
Comment posted July 7, 2010 @ 3:56 am

Buy Cheap Football Jerseys from Sport Jersey's Store, Basketball Jerseys, NFL Jerseys,NHL Jerseys, NBA Jerseys,MLB Jerseys,Hockey Jerseys,Cheap NFL Jerseys,Wholesale NFL Jerseys
Cowboys cheap jerseys Steelers cheap jerseys Saints cheap jerseys Vikings cheap jerseys Raiders cheap jerseysYou may need Summer Equipment,Have a good summer holiday:Many kind of Brand Sunglsss ,Puma Shoes,Converse Shoes,Nike Shox Shoes .

Women's Air Max LTD on sale,Men's Air Max LTD Shoes was introduced in 2002,Nike Air Max 95 and Nike Basketball shoes are hot now,Nike Air Max 2009 retail for men and women,Nike running shoes and mbt shoes are the latest stock to hit our shores,with more boots shoes online,Our nike sneakers like Mens Shox NZ and Womens Shox NZ sale online.


Robinegner
Comment posted July 7, 2010 @ 11:35 pm

After many attempts to get my mortgage company, WELLS FARGO, to modify my loan, I went to legal aid for the consiliation meeting and the lawyer asked the lender why I was not offered the Hamp program, Which I qualified for ? Their response was they would set up escrow in a couple days then enter it into Hamp, That was the end of January, I have called the Lender, left messages with no response, Waited, Waited, Waited to her anything from them. Today, July,7 2010, I got a copy of the attorneys certificate of compliance that was entered on July 2,2010. I never received ANYTHING from them since the Original meeting in January, How can They do This? The form was marked That the consiliation meeting was done & We could not come to an agreement,,,, What can I do about it? The attorney for the mortgage co. completely lied. Now What ?


Shariposey
Comment posted July 8, 2010 @ 3:22 am

Robinegner,
I would suggest escalating your case high up. First through a supervisor at Wells, then get on the internet and start emailing and calling vice presidents. It has worked for me a few times, although I haven't tried it with Wells. Additionally, I would contact your representative in the House and/or Senate. Many of them have people on their staff dedicated to this. Finally, make sure you call the Homeowner's Hope Hotline at 888-995-4673 and ask for the Help Team. Document Everything!!! Names of who you talk to, dates, and employee I.D. numbers.


Lancaster, Calif.: The Foreclosure Crisis from a Realtor's Eyes | Neon Tommy
Pingback posted February 11, 2011 @ 1:11 am

[...] was put in place in May 2009 to help people renegotiate the terms of their mortgages, has been slammed for its complexity and dismal success rates.  The Homeowner Affordable Foreclosure [...]


Overcome Panic Attacks
Trackback posted March 8, 2011 @ 9:55 am

Stop Panic Attacks…

[...]below you’ll find the link to some websites that I think you should go and see, some are related to my site and others are unrelated but definitely worth visiting[...]……


Cure Hemorrhoids
Trackback posted April 11, 2011 @ 7:25 am

Recent Favourite Sites…

[...]below you can check out my recommended links page http://www.hemorrhoidtreatmentcurerelief.com/my-favourite-sites/ with some fantastic websites that I think you should definitely visit[...]…


RSS feed for comments on this post.

Sorry, the comment form is closed at this time.