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Shortly after I first started writing about HAMP, I had an email exchange with a housing counselor who said I was being too harsh on the program, that borrowers in trouble had no recourse, and that I basically didn’t understand the pressure these homeowners were under. The dozens of emails I was getting from all around the country from borrowers, all of whom almost without exception were saying that HAMP was making their problem more intractable, differed with this counselor. And now, a year later, apparently the great majority of housing counselors disagree as well.
More than three-fourths of housing counselors responding to a survey conducted by the Government Accountability Office said borrowers hold a “negative” or “very negative” experience with the Home Affordable Modification Program.
The GAO received 500 responses to its October 2010 survey of roughly 130 housing agencies regarding HAMP. Nearly 400 responded to the question about how the borrowers they worked with felt about the program. Only 9% of the counselors said borrowers had a “positive” experience, according to the GAO report released Thursday.
The Treasury Department expressed concern in the GAO report about the lag time between the survey and current HAMP performance, but admitted some of the problems counselors brought to light still linger.
In other words, nice try Treasury, but your program still sucks.
In fact, at this point, I hasten to call it a program. The poor word of mouth, from both borrowers and now housing counselors, has slowed new applications to a crawl. HAMP has basically topped out on its “help” for homeowners. That’s probably good news for homeowners.
Treasury did make one improvement this week. They implemented a Net Present Value calculator (also available here). The net present value is the test that’s supposed to be used by servicers to determine eligibility for HAMP, by looking at the total income of a household and whether they can support a mortgage payment with a modification. The calculator runs the test for homeowners based on their records. So if you don’t qualify, you can find that out before wasting your time and making a bad decision on a HAMP trial modification. If you do qualify and the bank still turns you down, you have empirical evidence that contradicts them. It’s generally a good idea. And this builds on the single point of contact requirement Treasury added to HAMP this month.
But these would have been better ideas at the outset, so hundreds of thousands of borrowers wouldn’t have walked into the HAMP trap. And the credibility is so damaged now, that the program is just no longer useful.
…Incidentally, in that GAO report, the number one way cited for Treasury to improve HAMP is for them to actually enforce sanctions on noncompliant servicers. Two years into the program, there has not been one sanction enforced. 60% of housing counselors said that was an urgent priority.
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Leave Timmeh aloooonnnneeeee!!!!!
David, if you’d taken the time to do a cursory reading of the actual report you’d find that:
Extremely sloppy reporting really bordering on outright deception. Specifically the heading: “Over 75% of Housing Counsels Think HAMP Sucks”. That’s just flat out wrong. A fairer description would be that 75% of Housing Counsels thought that borrowers who contacted them for help were more likely to have negative experiences with the program than not. The problems with drawing your conclusions about whether the program is a success or not from such data should be bleeding obvious.
Can we expect an apology?
Apology for what?
Methods, results or conclusion?
The conclusion is that
1. HAMP sucks. Even the HAMP Counselors agree it sucks.
2. Treasury has done a piss poor job for the citizens of the country. For Geithner’s next job? An awesome job.
Go pick you own nits. And please attend to the beam in your own eye.
I think you will deserve an apology when HAMP (which sucks mightily) is either totally revamped (and re-named; too late to salvage it) so that it does what it was supposedly designed to do — help people who have been harmed by banksters and Wall Street to stay in their homes.
As currently designed, all HAMP does is suck unsuspecting, desperate homeowners into its maw, send them back again and again to re-submit paperwork they’ve submitted many times before, and basically buy the banksters enough time to open a parallel foreclosure proceeding against homeowners who have actually SELECTED THEMSELVES by applying for HAMP in the first place.
It is the very definition of perverse.
Someone is benefiting from the housing-value collapse. I’m thinking that it’s people who, thanks to Bush’s tax cuts for billionaires (actually Obama’s tax cuts for billionaires — he supports it; he owns it now) who have all that lovely cash lying around (what? not creating jobs with it? I’m shocked, shocked!) so they can vacuum up distressed properties.
The working and middle class have been decimated by politicians who have enacted policies that not only cost them their hard-earned money, it is destroying the fabric of America.
So hold your breath, waiting for that apology. You’ll get it when fairness returns to the marketplace in America.
Are you unable to read for comprehension? The report that David is writing about specifically states – in the methodology section – that the results of the surveys can not be interpreted in the very way that David then goes right ahead and does anyway.
Just explaining it to you once more – since you didn’t get it the first time:
1) “[B]orrowers seeking the help of counselors may be more likely to have questions or concerns about the HAMP program than borrowers who do not seek such help”. This is commonly known as selection bias. The survey can say something about what aspects of HAMP could be improved. The survey cant say anything about what borrowers think about HAMP in general.
2) “Even the HAMP Counselors agree it sucks.” This is as far as I understand it not at all supported by the report which did in fact ask councelors to estimate the sentiments of borrowers they were in contact with – not provide their own opinions.
So my issues with Davids piece stands. And I’d still like to hear him address them.
Your opinions are duly noted. But I don’t give a sh-t.
My issues are not with David’s opinions on HAMP – which he’s entitled to – but his inaccurate and deceptive description of the results of the GAO report.
He’s failing to accurately report that it explicitly states that results can not be assumed to be indicative of general borrower sentiment. He’s ascribing opinions about the program to councelors when they were in fact only asked their impression of borrower opinions. He’s summarizing the findings of the report as “In other words, nice try Treasury, but your program still sucks” which is clearly not warranted since the report cannot and doesn’t address overall success of the program but only areas of potential improvement from looking at the borrowers who did need help and did contact a councelor.
You are p-ssed off by the subprime meltdown and therefore it’s permissible to allow the spreading of inaccurate and deceptive information as long as it’s critical of Obama’s housing policies? Thanks, but I’ll wait for my apology – or at least for David to acknowledge what the report actually says – right now. Your outrage at the housing market is frankly irrelevant.