Politico: House votes to end HAMP

by Meredith Shiner

The House Tuesday voted to eliminate the last of four Obama administration housing programs, in an effectively symbolic vote to end the controversial Home Affordable Modification Program.

The loan program launched at the beginning of Barack Obama's presidency designed to aide millions of underwater homeowners. But since its launch, HAMP was dogged by inefficiencies, drawing harsh criticism from even the most ardent assistance supporters, including Democrats and members of the Congressional Black Caucus. The independent watchdogs charged with overseeing the program criticized it.

But even with House approval on a 252-170 vote, the legislation to pull the plug on the program likely will fail in the Senate and the White House already has said Obama would veto the bill if it were to reach his desk.

In testimony before the House Financial Services Committee earlier this month, Troubled Asset Relief Program chief watchdog Neil Barofsky called HAMP "a program that only benefits a small portion of distressed homeowners, offers others little more than false hope, and in certain cases causes more harm than good." TARP funds help assist more than 200,000 homeowners through the program.

Still, many in Congress and in the administration believe the answer to HAMP's woes is to "mend, not end" the stuggling program. They point to the more than half million Americans still in their homes because of the initiative.

Tuesday in anticipation of the House vote, 50 Democrats, led by Rep. Maxine Waters of California, sent a letter to Geithner urging him to push through changes of the beleaguered assistance program.
"While we believe terminating HAMP would be contrary to our goal of helping homeowners stay in their homes, we are keenly aware of the programs shortcomings and weaknesses," the representatives wrote, citing "simple steps" Treasury could take to improve the program.

In their letter, the lawmakers highlighted both independent and Congressional oversight of HAMP and pressed Geithner to consider past recommendations for fixes. Barofsky, for example, noted in the Financial Services hearing that the TARP special inspector general's office has offered 18 recommendations to Treasury, with the agency only fully implementing four of those changes at the time of his appearance.

The formal plea from House members Tuesday matches an earlier effort from 18 senators, led by Maine Republican Olympia Snowe and Oregon Democrat Jeff Merkley, who sent letters to Geithner, Secretary of the Department of Housing and Urban Development Shaun Donovan, and Federal Reserve Chairman Ben Bernanke urging swift streamlining of federal loan modification programs.

The Treasury responded Tuesday to calls for HAMP fixes and the symbolic message of another successful House vote in a POLITICO op-ed, in which acting Assistant Treasury Secretary Timothy Massad laid out the case to continue the programs as well as changes the agency will begin to make to improve the program.

"Beginning next month, Treasury will release a quarterly compliance scorecard for each of the 10 largest servicers. Each will be graded on key performance metrics, including evaluation of homeowners for modifications and whether their staff resources and internal processes dedicated to program implementation are sufficient," Massad wrote. "These mortgage companies also will be rated against their peers. We have and will continue to require that servicers take remedial actions to address inadequacies, and Treasury will begin withholding financial incentives from for servicers that receive an unsatisfactory grade."

Before Congressional recess, the House voted to eliminate the Neighborhood Stabilization Program, the FHA Refinance Program and the Emergency Homeowner Relief Fund.