Report Shows Little Supervision of HAMP
A report from the independent media organization ProPublica shows that, for years, there was little to no government supervision of the banks who participated in the government loan-modification program, the Home Affordable Modification Program. HAMP is supposed to provide relief to millions of homeowners that are at risk of foreclosure by providing them with affordable loan modifications.
The report reveals that “no major audits of the biggest banks were completed until well after HAMP’s launch.” Furthermore, the audits that did occur were conducted months after potentially wrongful conduct had occurred, and left homeowners with no way to have the banks fix foreclosures or loan modifications that they had mishandled.
When ProPublica requested documents from the government under the Freedom of Information Act, the government resisted. Finally, when a judge ordered the government to provide information, much of the paperwork was redacted.
This report is further evidence of something that our office has seen for over three years now — that although the banks pay lip service to their supposed desire to help homeowners, in practice, they make it confusing and difficult by failing to comply with the government requirements.
Some people say that this is a good reason to get rid of HAMP. But doing so would make things even worse for struggling homeowners. HAMP should instead be improved and strengthened so that banks have more incentives to comply with the HAMP guidelines. The HAMP program, with better oversight, would help more homeowners to save their homes from foreclosure. A number of courts have already found that banks who violate HAMP guidelines may be liable under consumer protection laws.
The best way to have one’s voice heard, and to put pressure on the government to enforce the existing regulations, is to write to your representatives in Congress (http://www.usa.gov/Contact/Elected.shtml), write to the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) (http://www.sigtarp.gov/pages/contactus.aspx), complain to the Massachusetts Division of Banks (http://www.massgov/dob), or complain to the new Consumer Financial Protect Bureau (http://www.cfpb.gov).