Treasury spends 3% of HAMP funds as of February
The Treasury Department has disbursed $1.04 billion of Troubled Asset Relief Program funds for HAMP as of Feb. 25, roughly 3% of what it has set aside, according to Katie Jones, analyst of housing policy of the Congressional Research Service.
In her written testimony prepared for a House Financial Services Committee hearing Wednesday, Jones provided a rundown of the four foreclosure prevention programs House Republicans are considering to terminate before they expire. These include the Federal Housing Administration Short Refi, the Emergency Homeowner Loan Program, the Hardest Hit Fund and the Neighborhood Stabilization Program.
The most high-profile federal program, however, is the Home Affordable Modification Program, which has received criticism from both sides of the aisle and Congressional watchdogs for not doing enough.
HAMP is entering its third year since it launched in March 2009. The Treasury originally estimated up to $75 billion would be spent on HAMP with $50 billion coming from TARP funds and $25 billion from Fannie Mae and Freddie Mac for the modification of its loans. However, the Treasury revised the amount of TARP money expected to just under $30 billion.
Of that, roughly 3% has been disbursed to participating servicers, investors and borrowers half way through the life of the program, Jones said.
As of December, there are 521,630 permanent and active modifications with another 152,289 in the trial stage under HAMP. That is far short of the Obama administration's original goal of reaching between 3 million and 4 million borrowers. Roughly 800,000 trials have been canceled, and more than half of those modified are Fannie and Freddie loans, Jones said.
And the number of new permanent modifications is trending downward.
Servicers began ramping up the amount of trial conversions in the first months of 2010 as more documentation came in from servicers. The monthly amounts peaked at 68,000 permanent modifications in April 2010 but then began to decrease.
By the end of 2010, an average of 32,000 loans were entering a trial every month, and 28,000 became permanent.
The Treasury has maintained that part of the program's success has been that the more numerous proprietary modifications were structured based on guidelines developed for HAMP. But Neil Barofsky, the Special Inspector General for TARP, said in written testimony for the same hearing that it is becoming harder and harder to support a program that is showing little hope for success.
On Wednesday, the Treasury is expected to release updated HAMP statistics for January.
Write to Jon Prior.
Follow him on Twitter: @JonAPrior
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