If you haven't had a chance to familiarize yourself with Edward J Pinto (currently a real estate financial services consultant who was Fannie Mae's chief credit officer in the late 1980s), you should. He's right on in terms of the failures of the HAMP program. Those of us who work in short sales or distressed property disposition are WELL aware of the inability of HAMP to approve sustainable modifications. His testimony from 6/24/2010 can be found at http://oversight.house.gov/images/stories/Hearings/Committee_on_Oversight/2010/062410_HAMP_II/TESTIMONY-Pinto.pdf
Everyone who works in this arena should make reading his testimony a priority. His very candid statmement that "The truth is HAMP has been a spectacular failure when measured against the original goal of helping 3-4 million homeowners avoid foreclosure" is refreshing. It's the old "Emporer's New Clothes" scenario. Let's call a spade a spade! I loved tongue-in-cheek testimony about HAMP guidelines: "The Treasury Department also promised 'clear and consistent loan modification guidelines that the entire mortgage industry can use.' There are only two words to describe HAMP's guidelines: numbing complexity. At last count HAMP had 800 requirements and servicers are expected to certify compliance."
Isn't ANYONE listening? Is EVERYONE asleep at the wheel? We have a CRISIS of EPIC proportions going on, and we're trying to solve it with incomprehensible rules and regs. The very real threat of trying to squeeze a basketball through a garden hose (i.e. the number of homeowners seeking help to prevent foreclosure compared to the industry's capacity to produce a meaningful modification or alternative) is staggering.
The most promising thing that came across my desk today was the Fattah (D-PA) amendment to the Financial Reform Legislation that suggests a radical idea: LET'S GIVE MONEY TO HOMEOWNERS vs. the banks!! "Under the program, qualified homeowners will be able to borrow up to $50,000 to assist them with monthly payments, provided they have 'a reasonable prospect' of resuming mortgage payments within 24 months." You can read that article at http://www.dsnews.com/articles/mortgage-relief-for-unemployed-secures-place-in-financial-reform-2010-06-25 Why not? Have programs giving money to the BANKS worked???