House Oversight Committee questions mortgage servicers on HAMP

The House Oversight Committee questioned the country's largest mortgage servicers Thursday about the $75 billion Home Affordable Modification Program, which has actually rejected more applicants for mortgage modifications than it has accepted. In March, the committee questioned Treasury officials.

Lawmakers on both side of the aisle blasted the program. Rep. Jim Jordan (R -Ohio) said the program was riddled with secrecy and dishonesty and accused Treasury of misrepresenting the program's goals to disguise its ineffectiveness.

Earlier this week, Treasury Secretary Timothy Geithner told the Congressional Oversight Panel that the program "was not designed to prevent foreclosures," even though the administration has made statements to the contrary.
Rep. Patrick McHenry (R-N.C.) called HAMP "an absolute failure," while Del. Eleanor Holmes Norton (D-D.C.) called the program a "disappointment."

"Perhaps we had our hopes too high," she said.

Rep. Dennis Kucinich (D-Ohio) and others told the mortgage servicers that borrowers are not learning why their HAMP applications are being denied, despite their best efforts to seek more clarity.

"We're glad you're doing what you're doing, but it's not enough," Kucinich said.

Lawmakers specifically asked about loans serviced by JPMorgan Chase & Co. Borrowers serviced by Chase waited an average of 7.4 months before seeing their HAMP trials converted to permanent modifications - a rate higher than any other major servicer. "The resource needs for this program have outstripped our ability to have the right number of people in seats performing the functions," said David Lowman, chief executive of Chase Home Finance.

Rep. Elijah Cummings (D-Md.) also lamented borrowers who get "the run around" when they try to call their servicers on the phone and get answers to their questions about HAMP. He highlighted problems with servicers who claim to lose borrowers' paperwork, one of the most common critiques of the program and also one of the most frustrating for those trying to navigate it.
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