Foreclosure Help: Obama Dodges Question on HAMP Impact

President Obama didn’t quite answer a rare question on his administration’s under-performing foreclosure prevention program when asked by Jon Stewart on “The Daily Show.”
During Thursday’s appearance on the popular Comedy Central show, Obama himself brought up the housing market crisis and his administration’s proposal to further expand refinancing opportunities for “underwater” homeowners who owe more on their mortgages than the value of their homes.
But Stewart abruptly raised doubts about the three-year-old Home Affordable Modification Program, or HAMP, which has been widely criticized by homeowner advocates for falling considerably short of its goal to help up to 4 million homeowners avoid foreclosures.
The most recent figures for HAMP through the end of August show that under 850,000 borrowers remain under permanent mortgage-reduction plans.
That’s out of 1.9 million modification trials initiated. Most were cancelled when the borrower re-defaulted. But lenders have been criticized for processing delays and even “dual-tracking,” the practice of moving forward with a foreclosure, even as the homeowner is negotiating a mortgage modification.
Moreover, a little over 10 percent of earmarked bailout funds for the program has been spent on incentives for mortgage servicers to re-negotiate with homeowners.
Obama dodged the matter of HAMP’s effectiveness, referring to 5 million homes saved from foreclosure. But that figure includes private foreclosure-prevention programs by lenders and foreclosure relief not yet fully realized under the $25 billion settlement between the government and the five top mortgage lenders.
Here’s the brief exchange on the Daily Show:
But don’t you have a HAMP program? Wasn’t there $50 billion set aside for HAMP and only five and a half billion dollars used.
Actually, what’s happened is we got 5 million homes where we’ve seen foreclosures prevented. We have a settlement with the banks that provides another $25 billion to help the housing market. But the central question is that there are a whole bunch of things we can do right now that will make the recovery even stronger…

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