Oversight Committee launching probe into effectiveness of HAMP

Oversight and Reform Committee website:

For immediate release: Saturday, February 6, 2010

WASHINGTON – Chairman Edolphus “Ed” Towns (D-NY) is taking steps to ensure success of the Federal government’s efforts to mitigate home foreclosure. The Committee is investigating the Treasury Department’s (Treasury) Making Home Affordable (MHA) program after receiving concerning information about the effectiveness and efficiency of MHA and the extent to which it has assisted struggling homeowners. Chairman Towns, who represents the New York’s 10th Congressional District located in Brooklyn, New York, is a strong proponent of efforts to ease the burden on struggling homeowners.

“I am pleased that Treasury has developed a plan utilizing a variety of techniques and resources to assist struggling homeowners under the overarching banner of the Making Home Affordable program,” said Chairman Towns. “While I applaud Treasury's efforts, numerous concerns have been brought to my attention regarding the effectiveness and efficiency of the MHA program and the extent to which it has assisted struggling homeowners.”

A centerpiece of the MHA program is the Home Affordable Modification Program (HAMP) which commits $75 billion for the purpose of reducing mortgage payments of qualified borrowers to no more than 31 percent of their monthly income. Based on complaints, the Committee is concerned that loan servicers have been slow to modify loans, inconsistent in their application of the program and are not communicating clearly with eligible homeowners.

In a letter to Treasury Secretary Timothy Geithner, Chairman Towns asks for specific data to help the Committee in its efforts to investigate HAMP and explains the basis for his concerns and request for information about Treasury’s efforts to embrace transparency and accountability for its mortgage modification programs.