HAMP Oversight is Pitiful

ProPublica investigation of  watchdog shows that the dog is asleep.  Also, it ate its own homework.  That’s why it can’t provide documents responsive to ProPublica’s Freedom of Information requests:

The audits of GMAC, though revealing, give only a limited view into the program, because the Treasury has refused to release the documents for other servicers. For more than a year, through a Freedom of Information Act request, ProPublica has sought the audits of 10 of the largest program participants. The Treasury provided only GMAC’s audits, because the company consented to their release. ProPublica continues to seek all of the reports.

Abuses of the foreclosure process, in which banks and mortgage servicers cut corners or even created false documents to move troubled borrowers out of their homes, have been extensively documented, along with failures by government to regulate the industry. But the lapses revealed in the documents obtained by ProPublica stand out because they occurred within the government’s main effort to prevent foreclosures, the Home Affordable Modification Program.

Oversight shrouded in secrecy

For HAMP’s first two years, the government offered very little public detail about its oversight efforts. It was virtually impossible for the public — or even Congress — to know how well the banks and mortgage servicers were complying with the government’s effort to prevent struggling homeowners from losing their homes. Those years were crucial, because that’s when servicers evaluated the vast majority of homeowners eligible for a modification — about three million.

The documents obtained by ProPublica show auditors finding serious problems at a major servicer during that time. Instead of publicly revealing the findings, Treasury chose to privately request that GMAC fix the problems.

“For two years, they’ve known how abysmal servicers were performing, and decided to do nothing,” said Neil Barofsky, the former special inspector general for the Troubled Asset Relief Program, better known as TARP or the bank bailout, which provided the money for HAMP.


One thought on “HAMP Oversight is Pitiful

  1. It’s actually worse than that.

    There are contracts spelling out pretty specifically what those participating banks have to do as a condition of being in the TARP program. I found some of the contracts online and they are NOT doing what they contracted to do at all. For instance it’s in violation of their contract foreclosing on someone who is pursuing a loan mod with them, it’s right there in the contract.

    But they routinely do foreclose under those specific circumstances.

    I contacted the drones at OCC some time ago and asked them when they were going to act on this problem of contracted banks not living up to their obligations. I asked them if they wanted me to come over there and go to work for them and enforce those contracts, because I would. I’d have gone and I am available.

    I got an evasion. Heh. Not much surprise there.


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