Statement from Superintendent Richard H. Neiman, TARP Congressional Oversight Panel Member, regarding the HAMP Termination Act
March 28, 2011
It is troubling that some lawmakers are considering eliminating support for American homeowners during the harshest recessionary period in American history.
Critics like myself have stated on numerous occasions that the Home Affordable Modification Program (HAMP) must continue to do better for American families. Our position remains the same. But killing the program is a far worse solution than even maintaining the status quo.
That HAMP has permanently modified mortgages for over 600,000 people is well known. Now with nearly 30,000 new mortgage modifications continuing to assist homeowners each month, we must focus on the additional hundreds of thousands of American families for whom HAMP can still provide badly needed help.
Further, the industry standards that HAMP set has led to millions of proprietary mortgage modifications to help homeowners outside of HAMP. Treasury must do more to oversee mortgage servicers, but ending the government's responsibility in this area would leave individual homeowners on their own to fend for themselves against the nation's biggest banks. During a time of heightened concern over unintended consequences, this cannot be the envisioned result that meets our aspirations.
The reality is that HAMP has made a difference and must be allowed to continue to do so. Before HAMP, mortgage servicers were increasing monthly payments in their mortgage modifications. Now, lower monthly payments are the norm, with HAMP modifications providing a $500 reduction in monthly payments on average and lower redefault rates.The financial abyss we feared would occur when TARP was passed thankfully did not materialize, but millions of homeowners are falling through the cracks that emerged and still need repair.