HAMP UNDERPERFORMS ON ITS PROMISES

I just read a very interesting and informative article from Housing Wire News(www.housingwirenews.com). It's source is a report from the Congressional Oversight Panel.

It says that the Home Affordable Modification Program (HAMP) will likely help to prevent up to 800,000 foreclosures before it expires at the end of 2012. HAMP was started by the Treasury Dept to give loan services an incentive to modify loans that were just about to go into foreclosure.

As of the end of October, servicers have completed around 519,000 permanent modifications. Originally it was estimated that this program would prevent from 3 million to 4 million homes from going into foreclosure.

However, as you can see in the chart below, the conversion rate from trial modifications to permanent modifications has gone down every mont since June 2010.

According to Tim Massad, of the Treasury Drpt, "It's been clear all along that the servicers were not equipped to handle this problem. They did not have the systems or the people. The process of modifying mortgages is incredibly people-intensive and resource-intensive. They've improved, but there's still a lot to do."

An unbelievavle amount of money has been thrown at this problem, resulting in a small percentage of people being able to keep their homes.

Has it been worth all the effort? Overall, it seems to have been an incredible waste of taxpayer dollars. However, if you were one of the homeowners saved from going into foreclosure, then you definitely will think it is worthwhile.

Please lety me know your opinion. Has this program been justified, or not?