The Congressional Oversight Panel has issued a report, the HAMP mortgage modification program is failing and failing miserably. But this is of course something that most homeowners facing foreclosure already know.
But the report went on to say:
Instead of helping 3 million to 4 million struggling mortgage borrowers keep their homes, as originally projected, HAMP will prevent only about 700,000 to 800,000 foreclosures. That number is dwarfed by the 8 million to 13 million foreclosures expected to occur by 2012.
Yes, we can't forget the 3 to 4 million foreclosures that HAMP was suppose to stop. Instead, we will be faced with upwards of 13 million foreclosures by 2012. Those aren't just numbers; those are real families who will lose their homes and dreams to foreclosure.
Because participation has been so limited, HAMP will probably only spend about $4 billion of the $30 billion allocated for it.
"Treasury's reluctance to acknowledge HAMP's shortcomings has had real consequences," said the report. "Absent a dramatic and unexpected increase in HAMP enrollment, many billions of dollars set aside for foreclosure mitigation may well be left unused. As a result, an untold number of borrowers may go without help -- all because Treasury failed to acknowledge HAMP's shortcomings in time."
At first glance it is almost unbelievable that our government would waste $30 billion dollars on a foreclosure prevention program that has proven without a doubt that it is failing at its stated mission. Thousands of Americans are going through the program only to re-default on their loans and many thousands more never even get the foreclosure help they need because servicers refuse to help.
Why is this foreclosure prevention program failing? It's failing because mortgage servicers make more money putting homeowners into foreclosure than they do trying to help them keep their homes. That's the reality of this foreclosure mess. If our legislators continue to fail to hold mortgage servicers and lenders accountable for their actions and in some cases inaction, we will continue to see the foreclosure casualties pile up.