Loans, Debt & Credit - View Single Post - U.S. Govenment Accounting Office report to The Senate

davephx · 09-25-2009, 10:30 PM

U.S. Govenment Accounting Office report to The Senate
9/24/09

HAMP faces a significant challenge that centers on uncertainty over the number of homeowners it will ultimately help. Residential mortgage defaults and foreclosures are at historical highs and Treasury officials and others have identified reducing the number of unnecessary foreclosures as critical to the current economic recovery. In our July 2009 report, we noted that Treasury’s estimate of the 3 to 4 million homeowners who would likely be helped under the HAMP loan modification program may have been overstated.

Further, concerns have been raised about the capacity and consistency of servicers participating in HAMP in offering loan modifications to qualified homeowners facing potential foreclosure. Treasury has taken some actions to encourage servicers to increase the number of modifications made, including sending a letter to participating HAMP servicers and meeting with them to discuss challenges to making modifications. However, the ultimate result of Treasury’s actions to increase the number of HAMP loan modifications and the corresponding impact on stabilizing the housing market remains to be seen.

Treasury faces other challenges in implementing HAMP, including ensuring that decisions to deny or approve a loan modification are transparent to borrowers and establishing an effective system of operational controls to oversee the compliance of participating servicers with HAMP guidelines.

In July 2009, we made six recommendations to Treasury to help improve the transparency and accountability of HAMP, which included recommending actions to monitor particular program requirements, reevaluate and review certain program components and assumptions, and strengthen internal controls over HAMP.

Treasury noted that it will take various actions in response to our recommendations, such as exploring options to monitor counseling requirements and working to refine its internal controls over HAMP. We plan to continue to monitor Treasury’s responses to our recommendations as part of our ongoing work on HAMP.

09-25-2009, 10:30 PM	#1 (permalink)
davephx Senior Member Join Date: Jul 2009 Posts: 3,151 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	U.S. Govenment Accounting Office report to The Senate U.S. Govenment Accounting Office report to The Senate 9/24/09 HAMP faces a significant challenge that centers on uncertainty over the number of homeowners it will ultimately help. Residential mortgage defaults and foreclosures are at historical highs and Treasury officials and others have identified reducing the number of unnecessary foreclosures as critical to the current economic recovery. In our July 2009 report, we noted that Treasury’s estimate of the 3 to 4 million homeowners who would likely be helped under the HAMP loan modification program may have been overstated. Further, concerns have been raised about the capacity and consistency of servicers participating in HAMP in offering loan modifications to qualified homeowners facing potential foreclosure. Treasury has taken some actions to encourage servicers to increase the number of modifications made, including sending a letter to participating HAMP servicers and meeting with them to discuss challenges to making modifications. However, the ultimate result of Treasury’s actions to increase the number of HAMP loan modifications and the corresponding impact on stabilizing the housing market remains to be seen. Treasury faces other challenges in implementing HAMP, including ensuring that decisions to deny or approve a loan modification are transparent to borrowers and establishing an effective system of operational controls to oversee the compliance of participating servicers with HAMP guidelines. In July 2009, we made six recommendations to Treasury to help improve the transparency and accountability of HAMP, which included recommending actions to monitor particular program requirements, reevaluate and review certain program components and assumptions, and strengthen internal controls over HAMP. Treasury noted that it will take various actions in response to our recommendations, such as exploring options to monitor counseling requirements and working to refine its internal controls over HAMP. We plan to continue to monitor Treasury’s responses to our recommendations as part of our ongoing work on HAMP.