Housing Program: Big Spending, Little Progress

In March 2009, the Treasury Department announced the $50 billion Home Affordable Modification Program, or HAMP, as a way to preserve home ownership and protect home values. 

Treasury claimed HAMP would result in 3 million to 4 million loan modifications.  In reality, there have been only 165,000 permanent modifications in the Troubled Asset Relief Program, or TARP, funded portion of HAMP, and 430,000 failed trial modifications, meaning failed modifications vastly outnumber successful ones.  Re-defaults look like they are going to be a real problem as well.

Treasury has yet to set goals or benchmarks for this program.  TARP’s Special Inspector General, Neil Barofsky, recently said Treasury’s failure to establish benchmarks “is a failure to recognize the basic tenets of [a] good government program: clear goals, clear expectations and clear description of performance against those benchmarks.”

Because there are no established goals or benchmarks, there is no way to know if this $50 billion program is accomplishing its goals.  Considering the lack of direction, it’s no surprise that far fewer homeowners have been helped than intended. 

To correct this problem, I sent a letter to Treasury Secretary Timothy Geithner urging the establishment of measurable goals and benchmarks for HAMP.   This program needs accountability and transparency.  Otherwise, it’s just more taxpayer money flying out the window. 

The letter I sent to Secretary Geithner is available here.