New GAO report: Home Affordable program needs to be more transparent, accountable

The U.S Government Accountability Office released a report yesterday calling on the Treasury to make the administration’s Home Affordable Modification Program (HAMP) more transparent and accountable. The 68-page report is the sixth in a series of reports issued by the GAO analyzing the effectiveness of the Troubled Asset Relief Program (TARP). The report includes the following recommendations:

1. consider methods for monitoring compliance with and the effectiveness of its counseling requirement;
2. reevaluate the basis and design for Home Price Decline Protection (HPDP) program;
3. regularly update assumptions and projections underlying the estimated number of borrowers likely to be helped by HAMP;
4. staff vacant positions within the Homeownership Preservation Office (HPO), and evaluate its staffing levels and competencies;
5. finalize a comprehensive system of internal control over HAMP; and
6. systematically assess servicer’s capacity to meet HAMP’s requirements during program admission.

The full report is available here.

Foreclosure Prevention: New Program Shows Big Jump

June 22, 2009 -- by Stephen Gandel -- Time

The government finally seems to be making progress in its efforts to stem the foreclosure crisis. Housing and Urban Development (HUD) officials say lenders extended loan-modification offers to 40,000 borrowers who were struggling to pay their mortgage in the second week of June. That is nearly triple the weekly average of about 15,000 workouts that loan servicers had extended in the prior 10 weeks since the government's latest foreclosure-prevention plan was announced.

"Foreclosures were becoming a self-reinforcing problem for the housing market," said HUD head Shawn Donovan, speaking to journalists last week at the National Association of Real Estate Editors' annual conference. "Already we are seeing signs that the housing market is better off than when President Obama took office."

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Helping Homeowners Stay Put

At work: Patricia Hull, housing counselor
Jun 21, 2009 -- By Nancy Jones-Bonbrest -- The Baltimore Sun

BALTIMORE--Patricia Hull, a former real estate agent, has changed the focus of her counseling from guiding people into homeownership to showing them how to keep their homes.

... It typically takes 60 to 90 days to get an answer from lenders as to whether they are agreeable to refinancing or modifying a loan or lowering a mortgage payment. During this time, Hull recommends that clients call their lenders weekly or every other week to check in.

Hull said the housing atmosphere has changed from seeing primarily clients with unfavorable loans to those who need assistance because of economic hardship. The federal Making Home Affordable program has helped open up options to homeowners, Hull said. This includes greater access to lenders and a consistency in how lenders work with customers.

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Column: Government homeowner efforts almost too little, too late

June 20, 2009 -- By Wayne A. Capurro, Special to the RGJ -- Reno-Gazette Journal

RENO--As Notice of Default filings climb to unprecedented levels throughout our community, through the Western region, Florida and other parts of our country, the Federal Government is, once again, on it’s way to the rescue. Through the Obama Administration’s “Making Home Affordable Program”, they claim they will save as many as nine million homeowners from foreclosure. Considering the crime that brought about the need for such a plan has the government’s fingerprints all over it, it’s the least they can do.

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Homeowners report confusing, frustrating loan modification process

Homeowners report confusing, frustrating loan modification process

To battle foreclosures, the Obama administration launched programs with hopeful names such as Making Home Affordable, but as many homeowners seeking assistance are learning, such programs have added more confusion than help.

Many people look at the criteria for refinancing, loan modifications and assistance, then approach their lenders because it appears they qualify for help. But many find that, for one reason or another, they aren’t getting assistance.

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Foreclosures grind on as lenders fail to modify loans

June 19, 2009 -- Stephanie Armour -- USA TODAY

The Obama administration's $75 billion program to reduce foreclosures has been beset by backlogs and delays, leading many overstretched homeowners to complain about unreturned phone calls and inaccurate information from lenders, while others say they were denied help for reasons that weren't clear.

Details of the plan were unveiled in early March. The goal is to prevent up to 4 million foreclosures by having banks modify loans into more affordable monthly payments.

Since its debut, the plan has led to offers of more than 190,000 mortgage modifications with lower monthly payments, according to the Treasury Department. During that time, lenders either have started or advanced foreclosure proceedings against more than 1 million homes, according to RealtyTrac. About 20% of those were foreclosed upon and repossessed. The Center for Responsible Lending says 2.4 million Americans are at risk of foreclosure in 2009, and 8.1 million could be over the next four years.

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Obama’s Mortgage Refinancing Program May Be Expanded

June 19, 2009 -- By Dawn Kopecki and Jody Shenn -- Bloomberg

Fannie Mae and Freddie Mac may get permission to begin refinancing mortgages with loan-to-value ratios above 105 percent as the Obama administration seeks to boost participation in its anti-foreclosure programs.

“We’re actively considering how to structure a program that makes sense over 105 percent,” Federal Housing Finance Agency Director James Lockhart said yesterday. He said a ratio of 125 percent “is a number” that’s on the table, though “not necessarily the number we’re going to end up with.”

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