US Treasury Secretary Timothy Geithner told ABC’s, “This Week” on Sunday that the government’s loan modification program has saved 750,000 homeowners thus far. He also admitted that many modifications have been only temporary and have not been made permanent. Approximately 66,000 people have received permanent mortgage modifications.
Congressman Ed Towns (D-NY), the House Government Oversight and Reform committee has opened an investigation into the Treasury Department’s loan modification program. In a letter to Treasury Secretary Timothy Geithner, Chairman Towns is asking the Treasury for specific data to help the Committee in its efforts to investigate HAMP. The letter goes on to explain the basis for his concerns and request for information about Treasury’s efforts to embrace transparency and accountability for its mortgage modification programs.
Downs said, “The Committee is investigating the Treasury Department’s (Treasury) Making Home Affordable (MHA) program after receiving concerning information about the effectiveness and efficiency of MHA and the extent to which it has assisted struggling homeowners.”
Secretary Geithner told ABC’s This Week, “This program is providing very, very substantial cash flow relief right now to more than 750,000 Americans. And we believe we’re still on a path to be able to reach many, many more American households. And of course, we’re going to make sure that those temporary modifications translate into permanent modifications.”
“We’re absolutely committed to make sure that translates into what we said it would, which is for eligible Americans, they’re getting permanent modifications that substantially lower their monthly payment,” he added.
Those programs were enormously effective in helping, again, pull a housing market that was in near collapse back to the point now where you’re seeing the signs of stability,” Geithner said.
New York Congressman Towns addressed Geithner’s optimism in the press release:
“While I applaud Treasury’s efforts, numerous concerns have been brought to my attention regarding the effectiveness and efficiency of the MHA program and the extent to which it has assisted struggling homeowners,” he said.
Towns said among the complaints he has received are that loan servicers have been slow to modify loans, are inconsistent in their application of the program and are not clear about the plan’s requirements with eligible homeowners.
“It is my understanding that Treasury has thus far refused to reveal in detail how it defines ‘net present value,’ one of the key criteria for homeowner participation in the mortgage modification program. Moreover, if a homeowner is denied a permanent mortgage modification, the specific reasons for the denial are not revealed. Finally, Treasury has not established a process for homeowners to appeal the denial of a permanent mortgage modification,” he concluded.