HAMP’s Done: Get Over It
I know I came down hard recently on the HAMP program and the disappointing numbers that have come out lately. Now I think my comments were completely justified. And as it turns out, so does the government. Maybe Obama reads my blog…
Either way, the fact that over half of the trial mods have been canceled and over 11% have re-defaulted just can’t be ignored. Just to recap the main numbers, Obama claimed 5 millions homeowners would be helped. Currently, 5.5 million are in foreclosures, 1.7 million have already been foreclosed on, and only 467,000 have made it to permanent modification status.
The Inspector General put it really clearly: “HAMP is failing to meet TARP’s goal…” This program will only end up reflecting badly on the government and its efforts to revive the economy.
The main problem with the program, according to Washington, is that the financial incentives to participate in the program just aren’t enough. Meaning, it makes better financial sense for a bank to foreclose in most situations than to allow the loan to be modified.
Though, the head of the Reserve Bank of Boston claimed that the answer is for the government to force banks to negotiate. And that just sounds retarded to me. Making laws to force a program to be successful just sounds irresponsible to me. But leave it to Washington to blame the banks instead of themselves. (Not that I think banks are completely innocent by any means. But we’ve already talked about that!)
We’ve known from the beginning of all these efforts that the answer lies with us in the short sale business. And for a while, it seemed that Washington was on board. But unfortunately, instead of letting an successful program go, they’re willing to force it down our throats. It drives me nuts! What about you?
