Despite now-stalled attempts by the Republican-controlled House of Representatives to end a cocktail of foreclosure programs — Home Affordable Modification Program, Neighborhood Stabilization Program, and the Emergency Homeowner Loan Program — the fact remains that some of the administration’s efforts to stem the foreclosure tide have produced less-than-stellar results.
Take HAMP, for example. Since its March 2009 implementation, it has established roughly two million temporary modifications and about 670,000 permanent ones — far off from the three- to four-million modification goal set when the program began. And while the administration has signaled that it wants longer-term mods as well as more principle reductions,, and while the incentive-based voluntary program has picked up significant steam over the past year, banks are still opting for proprietary modifications as well as pursuing a “dual track” approach that allows a bank to simultaneously move forward on a foreclosure while a homeowner navigates a Byzantine set of paperwork in the hopes of getting a modification. All this has led to many one-time HAMP proponents to say it’s time to call it quits on HAMP and hit refresh.
Constructively beating up HAMP, while useful, is easy. But, like Joe Kriesberg of the Massachusetts Association of Community Development Association says, we can recognize its upside and would really like to see it work better, rather than be nixed. So we were happy with the news that by this fall, the 20 largest HAMP servicers will be required to assign a “relationship manager” to qualified HAMP applicants. Folks pushing for a less complicated application process had been, up to now, referring to this as a “single point of contact.”
Advocates and reform-minded legislators, including Oregon Sen. Jeff Merkley (who has also called to end dual-track practices) have argued for these types of changes. Merkley’s also been at the lead calling for a national short refinance program — allowing underwater homeowners who still have reliable income to refinance under current interest rates and lowered principle based on current home values. Other reforms include extending the bankruptcy law to families looking for a restructured mortgage.
In more than two years of HAMP, we know all too well that playing the banks’ game in helping the consumer has not fired that magic bullet, and we’re pretty sure that a “relationship manager” will not produce that bullet either. It’s a step, however, and we’ll watch its progress.
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