Stale Bread: Treasury Foreclosure Prevention Programs under Review
In its December oversight report, “A Review of Treasury’s Foreclosure Prevention Programs,” released on Tuesday, the Congressional Oversight Panel takes a hard, detailed look at the status of the Home Affordable Modification Program (HAMP). Treasury’s flagship foreclosure mitigation effort has thus far resulted in 519,648 permanent modifications, a far cry from the numbers promised when the program begin. Add in that 541,907 borrowers placed on trial modifications have been dropped from the program, and the fanfare surrounding its introduction starts to feel a lot like wishful thinking.
The report also makes comparisons between HAMP and the Home Owners’ Loan Corporation (HOLC), which operated during the Great Depression. HAMP came up short: the HOLC was a larger-scale program with higher initial enrollment numbers and longer-lasting results. However, the report does note that HOLC’s recipients had more equity in their homes at the time of application, so they were on a more solid economic footing to begin with. And that’s not a statement you can often make about anything from the Depression.