The Home Affordable Modification Program -- designed to reduce homeowners’ monthly mortgage payments and to keep them in their homes -- has been an abysmal
The Home Affordable Modification Program — designed to reduce homeowners’ monthly mortgage payments and to keep them in their homes — has been an abysmal failure. Back in January, my colleague Mary Kane reported that the program showed signs of falling far short of its goals. It has continued to do so throughout the year, kicking out far more homeowners than it has helped to permanent modifications. And even the permanent modifications themselves have been lackluster. Many homeowners re-default. Recently, I reported on a family that went through the HAMP modification process only to find their monthly bill reduced by $37.96 a month.
Even the government’s own watchdog over HAMP — Neil Barofsky, the special inspector general over the Troubled Asset Relief Program — has blasted it as inefficient and ineffective at stopping the foreclosure crisis. He has also lambasted Treasury for sexing up its statements about the program:
Treasury clings to its prior statements that it plans to offer trial modifications to three to four million homeowners, a measure that SIGTARP has previously shown to be essentially meaningless. Treasury’s refusal to provide meaningful goals for this important program is a fundamental failure of transparency and accountability that makes it far more difficult for the American people and their representatives in Congress to assess whether the program’s benefits are worth its very substantial cost.
But now, James Pethokoukis reports at Reuters, the Obama administration might be pushing for a very, very big improvement to HAMP indeed. Rather than modifying mortgages, the Obama administration might instruct Fannie Mae and Freddie Mac to write down the mortgages, reducing the principal rather than the monthly payments:
Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages — one in five — are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011.
He describes the timing as political:
The president’s approval ratings are continuing to erode, as are Democratic election polls. Democrats are in real danger of losing the House and almost losing the Senate. The mortgage Hail Mary would be a last-gasp effort to prevent this from happening and to save the Obama agenda. The political calculation is that the number of grateful Americans would be greater than those offended that they — and their children and their grandchildren — would be paying for someone else’s mortgage woes.
The question is whether this really is a good move politically if housing has stabilized. It will be expensive, very, very expensive. And my guess is that Republicans would love to campaign on this, easily and rightly characterized as a mass taxpayer bailout of underwater homeowners. For that reason, I would be surprised to see the administration do it. Forcing the banks to enact cramdown or changing bankruptcy laws would be one thing. But doing this through Treasury, politically, would be quite another.
$1.89 billion given to states to fight HIV
The federal government Monday announced more than $1.89 billion in funding to states to fight the HIV epidemic with access to care and with more cash for the failing AIDS Drug Assistance Program. According to an HHS press release , $813 million of that money will go directly to the ADAP programming. An additional $8,386,340 will be issued as a supplement to 36 states and territories currently facing a litany of unmet needs and access issues.
Army Data Shows Constraints on Troop Increase Potential
If President Obama orders an additional 30,000 to 40,000 troops to Afghanistan, he will be deploying practically every available U.S. Army brigade to war, leaving few units in reserve in case of an unforeseen emergency and further stressing a force that has seen repeated combat deployments since 2002.
1. Brian Schweitzer
As governor of Montana, Schweitzer doesn’t represent one of the most highly populated, high-profile electoral states in the country. But this
$1.3 Million for Brown
The GOP’s candidate in the Massachusetts special election raised more than one million dollars -- double the goal -- in a 24-hour moneybomb on the Ron Paul
$1.3 trillion in federal spending unaccounted for, report finds
Despite calls for independent bodies to keep government accountable, the Sunlight Foundation’s most recent Clearspending report has found the federal
#1 in Conspiracy Theories
Andrew Young’s tell-all biography of John Edwards, hitting shelves next week, is surging in one Amazon.com category in particular. #1 in Conspiracy
1 Brigade and 1 Battalion
ISTANBUL – It’s 10 p.m. in the lowest level of the Istanbul airport. In 20 minutes I’ll be allowed to board my plane to Kabul, bringing me to the
$1 Million for Toomey
Pat Toomey, the former Club for Growth president and leading Republican candidate in Pennsylvania’s 2010 Senate race, has announced a $1 million haul in the
1. Lindsey Graham
Sen. Graham (R-S.C.) is typically regarded as a reliable vote for his party, but he took the bold step of breaking with his fellow Republicans to join Kerry
Bachmann uncomfortable over earmarks ban
Republicans appear to have boxed themselves into a corner with their portrayal of earmarks as wasteful spending, as many of them have backed a moratorium on
Troubled mine holds hope for U.S. rare earth industry
China currently controls 97 percent of the world’s rare earth production. The Mountain Pass Mine could change that -- if it can overcome serious environmental concerns.