Republican lawmakers blasted the Obama administration’s mortgage assistance program last week, claiming that it has harmed the nation’s economic recovery.
Representatives Darrell Issa (R-Calif.) and Jim Jordan (R-Ohio) argue that the $75 billion Home Affordable Modification Program (HAMP), which provides incentives for mortgage companies to modify loans of qualified buyers, has failed "by every empirical measure" and is a waste of taxpayer’s money.
When President Obama unveiled the program one year ago, he said that it would help 3 million to 4 million homeowners avoid foreclosure, according to ABC News. As of last month, the Treasury Department estimated that 116,000 homeowners have received permanent loan modifications.
"[The] Treasury’s own data suggests that hundreds of thousands of homeowners would receive temporary modifications but fail to qualify for permanent ones, thus ultimately leading to default," said the lawmakers. "These homeowners would have been better off if they had defaulted earlier and spent the payments on more affordable housing options."
Officials with the Treasury Department have admitted that the treatment of borrowers has been a dilemma over the past year, according to the Associated Press. They are currently working on several consumer protection provisions, including barring lenders from foreclosing on homeowners while their applications are being considered.