The debate over the success or failure of the federal government's Home Affordable Mortgage Program, or HAMP, entered a new phase two weeks ago, when Rep. Jim Jordan, R-Ohio, introduced a bill that would all but eliminate the entire program.
The bill, H.R. 430, HAMP Repeal and Deficit Reduction Act of 2011, would end any HAMP assistance to homeowners, unless they'd already received a trial or permanent loan modification offer though the program prior to the law's enactment. Authorized, but unobligated HAMP funds would be used to reduce the federal debt.
The bill, wonderfully short at just 647 words, so far has attracted three co-sponsors: Reps. Darrell Issa, R-Calif., Patrick McHenry, R-N.C., and Dennis Ross, R-Fla.
The full text of H.R. 430 points out that HAMP was supposed to aid 3-4 million financially struggling homeowners, but as of December 2010, had resulted in only 504,648 active permanent mortgage modifications, plus another 774,081 canceled mortgage modifications, a 3:2 ratio of failure to pending. The findings also state that "many homeowners whose modifications were canceled suffered because they made futile payments -- some were even forced into foreclosure as a result" and, quite bluntly, that "HAMP is a failure."
Jordan and Issa have had HAMP on their hit list for some time. In an August 2010 editorial in The Wall Street Journal, the two Congressmen wrote:
It is hard to conclude otherwise than that this program has wasted taxpayer money to accomplish in more time, with fewer results, what the private sector was already doing.
Unfortunately, too many people have struggled to stay in homes they cannot afford even with taxpayer-subsidized relief. They've thrown away resources on mortgage payments and fees that could have been applied toward other suitable housing within their means. Furthermore, their credit scores—which had already suffered serious hits—are now further threatened by redefaults and will take more time to recover.
Whether H.R. 430 will attract more support and actually move forward through the Congressional committees is an open question. Even less likely would be the necessary presidential signature for the bill to become law and actually do away with HAMP. Yet the effort nonetheless calls more attention to the program's well-documented limitations and shortcomings.
What's your opinion: Should HAMP be eliminated?