Skip to main content

SIGTARP Reports HAMP Hampered by Redefaults

Robert Ottone
Jul 26, 2013

A report from the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) brings news of borrowers redefaulting on their mortgages at alarming rates, as 306,000 people who have taken advantage of the Home Affordable Modification Program (HAMP) are now failing to make payments on their mortgages. Only four years after its inception, HAMP borrowers were investigated by SIGTARP in the agency's Q2 Report to Congress which found that of the 1.2 million homeoners who have made use of the HAMP program, nearly one-third of that total have failed to continue to make payments. Also interesting is that SIGTARP found that the longer an individual remains with a HAMP modification, the more likely that borrower is to default on their loan, with nearly 46 percent of those enrolled in the program since 2009 re-defaulting. The recent announcement that HAMP is being extended for an additional two years is meant to increase the number of homeowners currently enrolled, while also seeking to prevent the amount of homeowners default. "The Treasury needs to research why so many borrowers are dropping out of the program," said Christy Romero, Special Inspector General of SIGTARP. Some of the concepts kicked around by SIGTARP in their report include: ►Conducting further research into the causes of redefault; ►Requiring servicers to develop and use an “early warning system” to actively reach out to homeowners who may be at risk of redefaulting; and ►Providing help and information to homeowners who have redefaulted “Unfortunately, the real tragedy is that many borrowers probably could not afford the house at the time the loan was consummated. Sometimes a foreclosure is the only real outcome,” said John H.P. Hudson, area manager for San Antonio, Texas-based Premier Nationwide Lending. “The government programs may have had the best intentions of saving; however, their execution was not always up to par.”
Published
Jul 26, 2013
OCC Fines Sterling Bank & Trust $6M Over Mortgage Fraud

Bank, parent company remain under criminal investigation by Justice Department and SEC.

Regulation and Compliance
Sep 27, 2022
Federal Court Shutters Sham Mortgage Relief Operation

FTC, California agency accuse 2 business owners of scam that cost consumers millions of dollars.

Regulation and Compliance
Sep 22, 2022
CFPB Seeks Input On Creating New Mortgage Products

Agency seeks information on refinances, mortgage products to promote competition and support household financial stability.

Regulation and Compliance
Sep 22, 2022
The Fed Raises Interest Rate 0.75% For The 3rd Time

Chairman said housing market may have to go through "a correction" to return to balance.

Regulation and Compliance
Sep 21, 2022
Fed Committee Gathers To Renew Inflation Fight

FOMC expected to announced 0.75% rate hike after 2-day meeting ends Wednesday.

Regulation and Compliance
Sep 20, 2022
MISMO Releases New Reference Model For Public Comment 

Version 3.6 of the MISMO Reference Model includes new data points and structures.

Regulation and Compliance
Sep 19, 2022