Showing posts with label HAMP. Show all posts
Showing posts with label HAMP. Show all posts
Friday, June 8, 2012
Tuesday, December 6, 2011
HOPE Hotline
Applying for a modification through HAMP is free, and homeowners interested in pursuing a modification can call the Homeowner’s HOPE Hotline at 1.888.995.HOPE for more information and to make sure they receive help from a legitimate source.
Tuesday, May 10, 2011
New HAMP Report
http://www.treasury.gov/initiatives/financial-stability/results/MHA-Reports/Documents/March%202011%20MHA%20Report%20FINAL.PDF
Sixteen percent of homeowners receiving permanent assistance through the government’s Home Affordable Modification Program (HAMP) have been disqualified from the program for missing three consecutive payments, according to Treasury.
Sixteen percent of homeowners receiving permanent assistance through the government’s Home Affordable Modification Program (HAMP) have been disqualified from the program for missing three consecutive payments, according to Treasury.
Wednesday, May 4, 2011
NEW FORECLOSURES JUMP 21 PERCENT IN MARCH
Foreclosure activity increased sharply in March, a sign that lenders are coming to grips with the documentation problems that led to the robo-signing scandal last fall, MortgageLoan.com reported yesterday. Foreclosures were initiated on more than 217,000 homes in March, a 21 percent increase over February's rate, according to information released today by the HOPE NOW alliance. Nearly 85,000 properties were forfeited through foreclosure sales during the month, a 35 percent increase over February. The increase in foreclosures occurred despite a declining trend in mortgage delinquencies. There were 2.63 million residential mortgages at least 60 days past due in March, a 6 percent decline from February's level of 2.78 million, which in turn represented a similar decline from 2.95 million in January. Meanwhile, the number of at-risk homeowners obtaining private mortgage loan modifications from their lenders also increased significantly in March. There was no updated information provided for loan modifications performed through the government's Home Affordable Modification Program (HAMP); however, private modifications have recently been outpacing HAMP modifications by about a 3-to-1 ratio.
Tuesday, April 12, 2011
Treasury Will Publish Servicer Scorecard Based on HAMP Performance
Timothy Massad, acting assistant Treasury secretary, said this week that beginning next month Treasury will start publishing a scorecard grading the largest servicers based on their compliance with the Home Affordable Modification Program (HAMP). Though members of the House voted yesterday to end the program, the Treasury is moving forward with its plans to hold servicers publicly accountable, basing the first report on performance in 2010. Massad says Treasury will withhold financial incentives for unsatisfactory grades. http://www.dsnews.com/articles/treasury-will-publish-servicer-scorecard-based-on-hamp-performance-2011-03-30
LFN Legislative & Regulatory Update - Federal Mortgage & Foreclosure Policy
1) The Senate Judiciary Committee 3/31/11 approved S. 222, the Sheldon Whitehouse (D-RI) bill that would clarify authority of bankruptcy courts to establish foreclosure mediation programs, approved on a party line vote of 10 Democrats to 8 Republicans. Possible Senate floor action not known at this time;
(2) The full House of Representatives passed H.R. 839, the HAMP Termination Act on March 29. The White House issued a statement stating that the President would veto H.R. 839 if the bill were presented to him; and
(3) Joint Banking Agency Risk Retention Rulemaking issued on 03/31/11 (it would exempt qualified residential mortgages from 5% risk retention pursuant to the Dodd-Frank Act). Comments are due June 10, 2011
Attachments:
- Rejected Grassley Amendment to S. 222 that would have required consent of all parties to participate in the mediation program, defeated by a vote of 10 to 8.
- Tabled (set aside) Coburn Amendment to S. 222 that would have terminated HAMP, defeated by voice vote.
- Rejected Coburn Amendment that would have required debtors to prove to the Bankruptcy Court that they would have been eligible for the HAMP program, defeated by voice vote. Click Here to review.
- Text of Joint Proposed Risk Retention Rulemaking.
Foreclosure Mediation Program Backed by Senate Judiciary
The Senate Judiciary Committee approved, 10-8, a bill (S 222) that would aim to help homeowners by explicitly authorizing bankruptcy courts to establish foreclosure mediation programs to facilitate negotiations with lenders. The following amendments were rejected:
S. 222 as Approved by Senate Judiciary Committee
S 222 IS
112th CONGRESS
1st Session
S. 222
To limit investor and homeowner losses in foreclosures, and for other purposes.
IN THE SENATE OF THE UNITED STATES
January 27, 2011
Mr. WHITEHOUSE introduced the following bill; which was read twice and referred to the Committee on the Judiciary
________________________________________
A BILL
To limit investor and homeowner losses in foreclosures, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Limiting Investor and Homeowner Loss in Foreclosure Act of 2010'.
SEC. 2. LOSS MITIGATION PROGRAMS.
(a) In General- Section 105 of title 11, United States Code, is amended by adding at the end the following:
`(e) Without limiting the court's authority under subsection (d) or under any other statute or rule, the court, by local rule or order, may establish and maintain a loss mitigation program for the consideration and negotiation of consensual alternatives to avoid foreclosure between an individual debtor and the holder of a claim secured by a security interest in real property that is the debtor's principal residence.'.
(b) Conforming Amendment- Section 362(e) of title 11, United States Code, is amended by adding at the end the following:
`(3) If the party in interest requesting relief from the stay under subsection (d) of this section participates in a loss mitigation program maintained pursuant to section 105(e) of this title, the time periods specified in paragraphs (1) and (2) of this subsection shall be tolled during the time period commencing on the date on which such participation began and ending on the date on which notice of such termination is filed and served on the debtor.'.
March 29, 2011
House Completes Four-Bill Agenda Targeting Mortgage Aid Programs
By Charlene Carter, CQ Staff
House Republicans on Tuesday pushed through legislation that would end another mortgage aid program backed by the White House.
The bill (HR 839) would terminate the Home Affordable Modification Program (HAMP), the Obama administration's flagship foreclosure prevention program.
The House passed the measure, 252-170, with 18 Democrats supporting it.
The vote wraps up the House's month long consideration of four GOP measures to end federal mortgage aid programs that Republicans say have failed to produce promised results.
President Obama has threatened to veto the HAMP measure as well as the three similar GOP bills. The Democratic Senate is unlikely to take up any of the measures.
Earlier this month, the House passed bills to end a mortgage aid program for unemployed homeowners facing foreclosure (HR 836), and to end a program established to help homeowners who owe more than their homes are worth refinance their loans (HR 830). The chamber also passed legislation (HR 861) this month to end the Neighborhood Stabilization Program, which provides grants to states and local governments and nonprofit organizations to purchase and redevelop abandoned or foreclosed homes.
Announced in February 2009, HAMP was designed to use money from the Troubled Asset Relief Program (PL 110-343) to give lenders incentives to renegotiate troubled loans with borrowers.
While the bill would restrict the Treasury secretary from facilitating new mortgage modifications, it also would allow those participating in HAMP before the measure's enactment to continue in the program.
More than 600,000 homeowners have worked out permanent mortgage modifications under the program, according to Treasury. Republicans and government oversight agencies have consistently criticized the program for being ineffective.
During HAMP's inception, administration officials estimated it would help up to 3 million to 4 million at-risk homeowners avoid foreclosure by allowing those eligible to modify their mortgages. Under the program, homeowners restructure their loans so that their monthly mortgage payment equals 31 percent of their pre-tax gross income.
HAMP Debate
Bill sponsor Patrick T. McHenry, R-N.C., said homeowners may suddenly face mortgage back-payments, penalties and even late fees that become due on their modified mortgages.
"By keeping this program open . . . it means that you'll have 800,000 Americans that will be left worse off because this program exists," McHenry said. "Worse off, their credit depleted, their home taken, their credit rating destroyed."
Illinois Republican Judy Biggert, chairwoman of the Financial Services Subcommittee on Insurance, Housing and Community Opportunity, said the housing market would be better served if it were free of government intervention and manipulation - leaving the private sector to work out mortgage modifications.
"Of the 4.1 million mortgage modifications that were completed, 3.5 million were done by the private sector with no government program and not a dime from the taxpayers," Biggert said.
Democrats argue that the voluntary nature of the program and the fact that servicers were slow to sign on hindered broad participation.
"The problem is that HAMP is the federal government bringing people into contact with the private sector. It is still openly a private sector decision," said Barney Frank of Massachusetts, the top Democrat on the House Financial Services Committee.
Timothy G. Massad, Treasury's acting assistant secretary for financial stability, acknowledged that a major difficulty in implementation of the program has been poor servicer performance. In remarks delivered Tuesday at Harvard University, Massad announced that beginning in April, Treasury's compliance reports on the program will include a scorecard for each of the largest HAMP servicers. Financial incentives intended to encourage participation will be withheld from those receiving unsatisfactory scores, Massad said.
Terminating the program "would immediately relax the pressure on mortgage companies to offer better assistance to struggling homeowners, creating unnecessary hurdles for those seeking relief," Massad said in prepared remarks.
Amendments
By voice vote, the House adopted an amendment by Loretta Sanchez, D-Calif., to express the sense of Congress that banks be encouraged to work with homeowners to provide loan modifications as well as foreclosure prevention and financial credit counseling.
The House adopted, 247-170, an amendment by Richard Hanna, R-N.Y., to add language to the bill stating that terminating HAMP would save taxpayers $1.4 billion. Hanna said he drafted the language to give the public additional facts on the intended consequences of legislation.
"Too often our constituents receive biased or incomplete information on the issues we're discussing in Congress, thus making it difficult for them to make informed assessments of our work," Hanna said.
The House adopted by voice vote an amendment by Francisco "Quico" Canseco, R-Texas, to require that all unobligated funds saved from ending HAMP not needed to assist existing program participants be used to pay down the federal debt.
Text of H.R. 839, the HAMP Termination Act, as passed by the House on March 29:
HR 839 EH
112th CONGRESS
1st Session
H. R. 839
________________________________________
AN ACT
To amend the Emergency Economic Stabilization Act of 2008 to terminate the authority of the Secretary of the Treasury to provide new assistance under the Home Affordable Modification Program, while preserving assistance to homeowners who were already extended an offer to participate in the Program, either on a trial or permanent basis.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `The HAMP Termination Act of 2011'.
SEC. 2. CONGRESSIONAL FINDINGS.
The Congress finds the following:
(1) According to the Department of the Treasury--
(A) the Home Affordable Modification Program (HAMP) is designed to `help as many as 3 to 4 million financially struggling homeowners avoid foreclosure by modifying loans to a level that is affordable for borrowers now and sustainable over the long term'; and
(B) as of February 2011, only 607,600 active permanent mortgage modifications were made under HAMP.
(2) Many homeowners whose HAMP modifications were canceled suffered because they made futile payments and some of those homeowners were even forced into foreclosure.
(3) The Special Inspector General for TARP reported that HAMP `benefits only a small portion of distressed homeowners, offers others little more than false hope, and in certain cases causes more harm than good'.
(4) Approximately $30 billion was obligated by the Department of the Treasury to HAMP, however, approximately only $840 million has been disbursed.
(5) Terminating HAMP would save American taxpayers approximately $1.4 billion, according to the Congressional Budget Office.
SEC. 3. TERMINATION OF AUTHORITY.
Section 120 of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5230) is amended by adding at the end the following new subsection:
`(c) Termination of Authority To Provide New Assistance Under the Home Affordable Modification Program-
`(1) IN GENERAL- Except as provided under paragraph (2), after the date of the enactment of this subsection the Secretary may not provide any assistance under the Home Affordable Modification Program under the Making Home Affordable initiative of the Secretary, authorized under this Act, on behalf of any homeowner.
`(2) PROTECTION OF EXISTING OBLIGATIONS ON BEHALF OF HOMEOWNERS ALREADY EXTENDED AN OFFER TO PARTICIPATE IN THE PROGRAM- Paragraph (1) shall not apply with respect to assistance provided on behalf of a homeowner who, before the date of the enactment of this subsection, was extended an offer to participate in the Home Affordable Modification Program on a trial or permanent basis.
`(3) DEFICIT REDUCTION-
`(A) USE OF UNOBLIGATED FUNDS- Notwithstanding any other provision of this title, the amounts described in subparagraph (B) shall not be available after the date of the enactment of this subsection for obligation or expenditure under the Home Affordable Modification Program of the Secretary, but should be covered into the General Fund of the Treasury and should be used only for reducing the budget deficit of the Federal Government.
`(B) IDENTIFICATION OF UNOBLIGATED FUNDS- The amounts described in this subparagraph are any amounts made available under title I of the Emergency Economic Stabilization Act of 2008 that--
`(i) have been allocated for use, but not yet obligated as of the date of the enactment of this subsection, under the Home Affordable Modification Program of the Secretary; and
`(ii) are not necessary for providing assistance under such Program on behalf of homeowners who, pursuant to paragraph (2), may be provided assistance after the date of the enactment of this subsection.
`(4) STUDY OF USE OF PROGRAM BY MEMBERS OF THE ARMED FORCES, VETERANS, AND GOLD STAR RECIPIENTS-
`(A) STUDY- The Secretary shall conduct a study to determine the extent of usage of the Home Affordable Modification Program by, and the impact of such Program on, covered homeowners.
`(B) REPORT- Not later than the expiration of the 90-day period beginning on the date of the enactment of this subsection, the Secretary shall submit to the Congress a report setting forth the results of the study under subparagraph (A) and identifying best practices, derived from studying the Home Affordable Modification Program, that could be applied to existing mortgage assistance programs available to covered homeowners.
`(C) COVERED HOMEOWNER- For purposes of this subsection, the term `covered homeowner' means a homeowner who is--
`(i) a member of the Armed Forces of the United States on active duty or the spouse or parent of such a member;
`(ii) a veteran, as such term is defined in section 101 of title 38, United States Code; or
`(iii) eligible to receive a Gold Star lapel pin under section 1126 of title 10, United States Code, as a widow, parent, or next of kin of a member of the Armed Forces person who died in a manner described in subsection (a) of such section.
`(5) PUBLICATION OF MEMBER AVAILABILITY FOR ASSISTANCE- Not later than 5 days after the date of the enactment of this subsection, the Secretary of the Treasury shall publish to its Website on the World Wide Web in a prominent location, large point font, and boldface type the following statement: `The Home Affordable Modification Program (HAMP) has been terminated. If you are having trouble paying your mortgage and need help contacting your lender or servicer for purposes of negotiating or acquiring a loan modification, please contact your Member of Congress to assist you in contacting your lender or servicer for the purpose of negotiating or acquiring a loan modification.'.
`(6) NOTIFICATION TO HAMP APPLICANTS REQUIRED-
`(A) IN GENERAL- Not later than 30 days after the date of the enactment of this subsection, the Secretary of the Treasury shall inform each individual who applied for the Home Affordable Modification Program and will not be considered for a modification under such Program due to termination of such Program under this subsection--
`(i) that such Program has been terminated;
`(ii) that loan modifications under such Program are no longer available;
`(iii) of the name and contact information of such individual's Member of Congress; and
`(iv) that the individual should contact his or her Member of Congress to assist the individual in contacting the individual's lender or servicer for the purpose of negotiating or acquiring a loan modification.'.
SEC. 4. SENSE OF CONGRESS.
The Congress encourages banks to work with homeowners to provide loan modifications to those that are eligible. The Congress also encourages banks to work and assist homeowners and prospective homeowners with foreclosure prevention programs and information on loan modifications.
Passed the House of Representatives March 29, 2011.
Attest:
Clerk.
Banking Agencies Seek Comment on Risk Retention Proposal
Six federal agencies are seeking comment on a proposed rule that would require sponsors of asset-backed securities (ABS) to retain at least 5 percent of the credit risk of the assets underlying the securities and would not permit sponsors to transfer or hedge that credit risk. In crafting the proposed rule, the agencies sought to ensure that the amount of credit risk retained is meaningful, while reducing the potential for the rule to negatively affect the availability and cost of credit to consumers and businesses.
The rule is proposed by the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the U.S. Securities and Exchange Commission, the Federal Housing Finance Agency, and the Department of Housing and Urban Development. It would provide sponsors with various options for meeting the risk-retention requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Among other things, the options include:
• retention of risk by holding at least 5 percent of each class of ABS issued in a securitization transaction (also known as vertical retention);
• retention of a first-loss residual interest in an amount equal to at least 5 percent of the par value of all ABS interests issued in a securitization transaction (horizontal retention);
• an equally-divided combination of vertical and horizontal retention;
• retention of a representative sample of the assets designated for securitization in an amount equal to at least 5 percent of the unpaid principal balance of all the designated assets; and
• for commercial mortgage-backed securities, retention of at least a 5 percent first-loss residual interest by a third party that specifically negotiates for the interest, if certain requirements are met.
As required by the act, the proposal includes descriptions of loans that would not be subject to these requirements, including asset-backed securities that are collateralized exclusively by residential mortgages that qualify as "qualified residential mortgages" (QRMs). The proposal would establish a definition for QRMs--incorporating such criteria as borrower credit history, payment terms, and loan-to-value ratio--designed to ensure they are of very high credit quality. The proposed rule also includes investor disclosure requirements regarding material information concerning the sponsor's retained interests in a securitization transaction. The disclosures would provide investors and the agencies with an efficient mechanism to monitor compliance with the risk-retention requirements of the proposed rules.
The proposed rule also has a zero percent risk-retention requirement for ABS collateralized exclusively by commercial loans, commercial mortgages, or automobile loans that meet certain underwriting standards. As with QRMs, these underwriting standards are designed to be robust and to ensure that the loans backing the ABS are of very low credit risk.
The proposed rule would also recognize that the 100 percent guarantee of principal and interest provided by Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Mortgage Loan Corporation) meets their risk-retention requirements as sponsors of mortgage-backed securities for as long as they are in conservatorship or receivership with capital support from the U.S. government.
The agencies request comments on the proposed rule by June 10, 2011.
(2) The full House of Representatives passed H.R. 839, the HAMP Termination Act on March 29. The White House issued a statement stating that the President would veto H.R. 839 if the bill were presented to him; and
(3) Joint Banking Agency Risk Retention Rulemaking issued on 03/31/11 (it would exempt qualified residential mortgages from 5% risk retention pursuant to the Dodd-Frank Act). Comments are due June 10, 2011
Attachments:
- Rejected Grassley Amendment to S. 222 that would have required consent of all parties to participate in the mediation program, defeated by a vote of 10 to 8.
- Tabled (set aside) Coburn Amendment to S. 222 that would have terminated HAMP, defeated by voice vote.
- Rejected Coburn Amendment that would have required debtors to prove to the Bankruptcy Court that they would have been eligible for the HAMP program, defeated by voice vote. Click Here to review.
- Text of Joint Proposed Risk Retention Rulemaking.
Foreclosure Mediation Program Backed by Senate Judiciary
The Senate Judiciary Committee approved, 10-8, a bill (S 222) that would aim to help homeowners by explicitly authorizing bankruptcy courts to establish foreclosure mediation programs to facilitate negotiations with lenders. The following amendments were rejected:
S. 222 as Approved by Senate Judiciary Committee
S 222 IS
112th CONGRESS
1st Session
S. 222
To limit investor and homeowner losses in foreclosures, and for other purposes.
IN THE SENATE OF THE UNITED STATES
January 27, 2011
Mr. WHITEHOUSE introduced the following bill; which was read twice and referred to the Committee on the Judiciary
________________________________________
A BILL
To limit investor and homeowner losses in foreclosures, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Limiting Investor and Homeowner Loss in Foreclosure Act of 2010'.
SEC. 2. LOSS MITIGATION PROGRAMS.
(a) In General- Section 105 of title 11, United States Code, is amended by adding at the end the following:
`(e) Without limiting the court's authority under subsection (d) or under any other statute or rule, the court, by local rule or order, may establish and maintain a loss mitigation program for the consideration and negotiation of consensual alternatives to avoid foreclosure between an individual debtor and the holder of a claim secured by a security interest in real property that is the debtor's principal residence.'.
(b) Conforming Amendment- Section 362(e) of title 11, United States Code, is amended by adding at the end the following:
`(3) If the party in interest requesting relief from the stay under subsection (d) of this section participates in a loss mitigation program maintained pursuant to section 105(e) of this title, the time periods specified in paragraphs (1) and (2) of this subsection shall be tolled during the time period commencing on the date on which such participation began and ending on the date on which notice of such termination is filed and served on the debtor.'.
March 29, 2011
House Completes Four-Bill Agenda Targeting Mortgage Aid Programs
By Charlene Carter, CQ Staff
House Republicans on Tuesday pushed through legislation that would end another mortgage aid program backed by the White House.
The bill (HR 839) would terminate the Home Affordable Modification Program (HAMP), the Obama administration's flagship foreclosure prevention program.
The House passed the measure, 252-170, with 18 Democrats supporting it.
The vote wraps up the House's month long consideration of four GOP measures to end federal mortgage aid programs that Republicans say have failed to produce promised results.
President Obama has threatened to veto the HAMP measure as well as the three similar GOP bills. The Democratic Senate is unlikely to take up any of the measures.
Earlier this month, the House passed bills to end a mortgage aid program for unemployed homeowners facing foreclosure (HR 836), and to end a program established to help homeowners who owe more than their homes are worth refinance their loans (HR 830). The chamber also passed legislation (HR 861) this month to end the Neighborhood Stabilization Program, which provides grants to states and local governments and nonprofit organizations to purchase and redevelop abandoned or foreclosed homes.
Announced in February 2009, HAMP was designed to use money from the Troubled Asset Relief Program (PL 110-343) to give lenders incentives to renegotiate troubled loans with borrowers.
While the bill would restrict the Treasury secretary from facilitating new mortgage modifications, it also would allow those participating in HAMP before the measure's enactment to continue in the program.
More than 600,000 homeowners have worked out permanent mortgage modifications under the program, according to Treasury. Republicans and government oversight agencies have consistently criticized the program for being ineffective.
During HAMP's inception, administration officials estimated it would help up to 3 million to 4 million at-risk homeowners avoid foreclosure by allowing those eligible to modify their mortgages. Under the program, homeowners restructure their loans so that their monthly mortgage payment equals 31 percent of their pre-tax gross income.
HAMP Debate
Bill sponsor Patrick T. McHenry, R-N.C., said homeowners may suddenly face mortgage back-payments, penalties and even late fees that become due on their modified mortgages.
"By keeping this program open . . . it means that you'll have 800,000 Americans that will be left worse off because this program exists," McHenry said. "Worse off, their credit depleted, their home taken, their credit rating destroyed."
Illinois Republican Judy Biggert, chairwoman of the Financial Services Subcommittee on Insurance, Housing and Community Opportunity, said the housing market would be better served if it were free of government intervention and manipulation - leaving the private sector to work out mortgage modifications.
"Of the 4.1 million mortgage modifications that were completed, 3.5 million were done by the private sector with no government program and not a dime from the taxpayers," Biggert said.
Democrats argue that the voluntary nature of the program and the fact that servicers were slow to sign on hindered broad participation.
"The problem is that HAMP is the federal government bringing people into contact with the private sector. It is still openly a private sector decision," said Barney Frank of Massachusetts, the top Democrat on the House Financial Services Committee.
Timothy G. Massad, Treasury's acting assistant secretary for financial stability, acknowledged that a major difficulty in implementation of the program has been poor servicer performance. In remarks delivered Tuesday at Harvard University, Massad announced that beginning in April, Treasury's compliance reports on the program will include a scorecard for each of the largest HAMP servicers. Financial incentives intended to encourage participation will be withheld from those receiving unsatisfactory scores, Massad said.
Terminating the program "would immediately relax the pressure on mortgage companies to offer better assistance to struggling homeowners, creating unnecessary hurdles for those seeking relief," Massad said in prepared remarks.
Amendments
By voice vote, the House adopted an amendment by Loretta Sanchez, D-Calif., to express the sense of Congress that banks be encouraged to work with homeowners to provide loan modifications as well as foreclosure prevention and financial credit counseling.
The House adopted, 247-170, an amendment by Richard Hanna, R-N.Y., to add language to the bill stating that terminating HAMP would save taxpayers $1.4 billion. Hanna said he drafted the language to give the public additional facts on the intended consequences of legislation.
"Too often our constituents receive biased or incomplete information on the issues we're discussing in Congress, thus making it difficult for them to make informed assessments of our work," Hanna said.
The House adopted by voice vote an amendment by Francisco "Quico" Canseco, R-Texas, to require that all unobligated funds saved from ending HAMP not needed to assist existing program participants be used to pay down the federal debt.
Text of H.R. 839, the HAMP Termination Act, as passed by the House on March 29:
HR 839 EH
112th CONGRESS
1st Session
H. R. 839
________________________________________
AN ACT
To amend the Emergency Economic Stabilization Act of 2008 to terminate the authority of the Secretary of the Treasury to provide new assistance under the Home Affordable Modification Program, while preserving assistance to homeowners who were already extended an offer to participate in the Program, either on a trial or permanent basis.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `The HAMP Termination Act of 2011'.
SEC. 2. CONGRESSIONAL FINDINGS.
The Congress finds the following:
(1) According to the Department of the Treasury--
(A) the Home Affordable Modification Program (HAMP) is designed to `help as many as 3 to 4 million financially struggling homeowners avoid foreclosure by modifying loans to a level that is affordable for borrowers now and sustainable over the long term'; and
(B) as of February 2011, only 607,600 active permanent mortgage modifications were made under HAMP.
(2) Many homeowners whose HAMP modifications were canceled suffered because they made futile payments and some of those homeowners were even forced into foreclosure.
(3) The Special Inspector General for TARP reported that HAMP `benefits only a small portion of distressed homeowners, offers others little more than false hope, and in certain cases causes more harm than good'.
(4) Approximately $30 billion was obligated by the Department of the Treasury to HAMP, however, approximately only $840 million has been disbursed.
(5) Terminating HAMP would save American taxpayers approximately $1.4 billion, according to the Congressional Budget Office.
SEC. 3. TERMINATION OF AUTHORITY.
Section 120 of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5230) is amended by adding at the end the following new subsection:
`(c) Termination of Authority To Provide New Assistance Under the Home Affordable Modification Program-
`(1) IN GENERAL- Except as provided under paragraph (2), after the date of the enactment of this subsection the Secretary may not provide any assistance under the Home Affordable Modification Program under the Making Home Affordable initiative of the Secretary, authorized under this Act, on behalf of any homeowner.
`(2) PROTECTION OF EXISTING OBLIGATIONS ON BEHALF OF HOMEOWNERS ALREADY EXTENDED AN OFFER TO PARTICIPATE IN THE PROGRAM- Paragraph (1) shall not apply with respect to assistance provided on behalf of a homeowner who, before the date of the enactment of this subsection, was extended an offer to participate in the Home Affordable Modification Program on a trial or permanent basis.
`(3) DEFICIT REDUCTION-
`(A) USE OF UNOBLIGATED FUNDS- Notwithstanding any other provision of this title, the amounts described in subparagraph (B) shall not be available after the date of the enactment of this subsection for obligation or expenditure under the Home Affordable Modification Program of the Secretary, but should be covered into the General Fund of the Treasury and should be used only for reducing the budget deficit of the Federal Government.
`(B) IDENTIFICATION OF UNOBLIGATED FUNDS- The amounts described in this subparagraph are any amounts made available under title I of the Emergency Economic Stabilization Act of 2008 that--
`(i) have been allocated for use, but not yet obligated as of the date of the enactment of this subsection, under the Home Affordable Modification Program of the Secretary; and
`(ii) are not necessary for providing assistance under such Program on behalf of homeowners who, pursuant to paragraph (2), may be provided assistance after the date of the enactment of this subsection.
`(4) STUDY OF USE OF PROGRAM BY MEMBERS OF THE ARMED FORCES, VETERANS, AND GOLD STAR RECIPIENTS-
`(A) STUDY- The Secretary shall conduct a study to determine the extent of usage of the Home Affordable Modification Program by, and the impact of such Program on, covered homeowners.
`(B) REPORT- Not later than the expiration of the 90-day period beginning on the date of the enactment of this subsection, the Secretary shall submit to the Congress a report setting forth the results of the study under subparagraph (A) and identifying best practices, derived from studying the Home Affordable Modification Program, that could be applied to existing mortgage assistance programs available to covered homeowners.
`(C) COVERED HOMEOWNER- For purposes of this subsection, the term `covered homeowner' means a homeowner who is--
`(i) a member of the Armed Forces of the United States on active duty or the spouse or parent of such a member;
`(ii) a veteran, as such term is defined in section 101 of title 38, United States Code; or
`(iii) eligible to receive a Gold Star lapel pin under section 1126 of title 10, United States Code, as a widow, parent, or next of kin of a member of the Armed Forces person who died in a manner described in subsection (a) of such section.
`(5) PUBLICATION OF MEMBER AVAILABILITY FOR ASSISTANCE- Not later than 5 days after the date of the enactment of this subsection, the Secretary of the Treasury shall publish to its Website on the World Wide Web in a prominent location, large point font, and boldface type the following statement: `The Home Affordable Modification Program (HAMP) has been terminated. If you are having trouble paying your mortgage and need help contacting your lender or servicer for purposes of negotiating or acquiring a loan modification, please contact your Member of Congress to assist you in contacting your lender or servicer for the purpose of negotiating or acquiring a loan modification.'.
`(6) NOTIFICATION TO HAMP APPLICANTS REQUIRED-
`(A) IN GENERAL- Not later than 30 days after the date of the enactment of this subsection, the Secretary of the Treasury shall inform each individual who applied for the Home Affordable Modification Program and will not be considered for a modification under such Program due to termination of such Program under this subsection--
`(i) that such Program has been terminated;
`(ii) that loan modifications under such Program are no longer available;
`(iii) of the name and contact information of such individual's Member of Congress; and
`(iv) that the individual should contact his or her Member of Congress to assist the individual in contacting the individual's lender or servicer for the purpose of negotiating or acquiring a loan modification.'.
SEC. 4. SENSE OF CONGRESS.
The Congress encourages banks to work with homeowners to provide loan modifications to those that are eligible. The Congress also encourages banks to work and assist homeowners and prospective homeowners with foreclosure prevention programs and information on loan modifications.
Passed the House of Representatives March 29, 2011.
Attest:
Clerk.
Banking Agencies Seek Comment on Risk Retention Proposal
Six federal agencies are seeking comment on a proposed rule that would require sponsors of asset-backed securities (ABS) to retain at least 5 percent of the credit risk of the assets underlying the securities and would not permit sponsors to transfer or hedge that credit risk. In crafting the proposed rule, the agencies sought to ensure that the amount of credit risk retained is meaningful, while reducing the potential for the rule to negatively affect the availability and cost of credit to consumers and businesses.
The rule is proposed by the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the U.S. Securities and Exchange Commission, the Federal Housing Finance Agency, and the Department of Housing and Urban Development. It would provide sponsors with various options for meeting the risk-retention requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Among other things, the options include:
• retention of risk by holding at least 5 percent of each class of ABS issued in a securitization transaction (also known as vertical retention);
• retention of a first-loss residual interest in an amount equal to at least 5 percent of the par value of all ABS interests issued in a securitization transaction (horizontal retention);
• an equally-divided combination of vertical and horizontal retention;
• retention of a representative sample of the assets designated for securitization in an amount equal to at least 5 percent of the unpaid principal balance of all the designated assets; and
• for commercial mortgage-backed securities, retention of at least a 5 percent first-loss residual interest by a third party that specifically negotiates for the interest, if certain requirements are met.
As required by the act, the proposal includes descriptions of loans that would not be subject to these requirements, including asset-backed securities that are collateralized exclusively by residential mortgages that qualify as "qualified residential mortgages" (QRMs). The proposal would establish a definition for QRMs--incorporating such criteria as borrower credit history, payment terms, and loan-to-value ratio--designed to ensure they are of very high credit quality. The proposed rule also includes investor disclosure requirements regarding material information concerning the sponsor's retained interests in a securitization transaction. The disclosures would provide investors and the agencies with an efficient mechanism to monitor compliance with the risk-retention requirements of the proposed rules.
The proposed rule also has a zero percent risk-retention requirement for ABS collateralized exclusively by commercial loans, commercial mortgages, or automobile loans that meet certain underwriting standards. As with QRMs, these underwriting standards are designed to be robust and to ensure that the loans backing the ABS are of very low credit risk.
The proposed rule would also recognize that the 100 percent guarantee of principal and interest provided by Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Mortgage Loan Corporation) meets their risk-retention requirements as sponsors of mortgage-backed securities for as long as they are in conservatorship or receivership with capital support from the U.S. government.
The agencies request comments on the proposed rule by June 10, 2011.
Senators Propose Homeowner Advocacy Office for HAMP Grievances
The Homeowner Advocate Act of 2011 (S.690) would create an Office of the Homeowner Advocate for the purpose of protecting homeowners seeking mortgage modifications through HAMP.
Although the Treasury Department has vowed to hold mortgage servicers publicly accountable for their adherence to Home Affordable Modification Program (HAMP) guidelines, some senators want to go one step further. They have proposed establishing a new federal agency as a means of recourse for "families who face foreclosure but believe their mortgage servicers are breaking the rules." Legislators say if the bill passes, HAMP has the potential of reaching its original goal of helping 3 to 4 million homeowners.
The legislators say the new HAMP office would be modeled after the Office of the Taxpayer Advocate at the Internal Revenue Service (IRS). And we all know how helpful and friendly they are.
Although the Treasury Department has vowed to hold mortgage servicers publicly accountable for their adherence to Home Affordable Modification Program (HAMP) guidelines, some senators want to go one step further. They have proposed establishing a new federal agency as a means of recourse for "families who face foreclosure but believe their mortgage servicers are breaking the rules." Legislators say if the bill passes, HAMP has the potential of reaching its original goal of helping 3 to 4 million homeowners.
The legislators say the new HAMP office would be modeled after the Office of the Taxpayer Advocate at the Internal Revenue Service (IRS). And we all know how helpful and friendly they are.
Wednesday, March 30, 2011
House Votes to End Obama Foreclosure-Relief Program
The GOP-controlled House voted 252-170 yesterday to eliminate the Home Affordable Modification Program (HAMP), the Obama administration's main program to provide foreclosure relief, CongressDaily reported today. Created nearly two years ago, HAMP has helped 600,000 homeowners avoid foreclosure, according to administration officials. Republicans argue that the program wastes taxpayer dollars and point out that the administration initially promised that it would help 3 million to 4 million homeowners. The bill has little chance of becoming law, since the Democratic-controlled Senate is almost certain to block it and the White House has threatened to veto it. However, 50 Democrats led by Rep. Maxine Waters (D-Calif.) sent a letter to Treasury Secretary Timothy Geithner demanding that regulators "immediately" fix a slew of mortgage-servicing problems. The group said that it was not giving up on HAMP but was fed up with the program's meager results.
Tuesday, March 29, 2011
Loan Lockdown: Could Mediation Leave Servicers' Hands Tied?
http://www.mortgageorb.com/e107_plugins/content/content.php?content.8157
Several pieces of servicing-related legislation were introduced in the first month of the 112th U.S. Congress. Among the bills brought to the floor in the Senate was the Limiting Investor and Homeowner Loss in Foreclosure Act of 2010 (S.222), which would amend the Bankruptcy Code and grant courts nationwide the authority to order servicers and borrowers.
Several pieces of servicing-related legislation were introduced in the first month of the 112th U.S. Congress. Among the bills brought to the floor in the Senate was the Limiting Investor and Homeowner Loss in Foreclosure Act of 2010 (S.222), which would amend the Bankruptcy Code and grant courts nationwide the authority to order servicers and borrowers.
Monday, March 21, 2011
Senators Introduce Own Legislation to End HAMP
With so much attention focused on the House's efforts to stamp out four federal foreclosure programs, a bill making its way through the Senate - which like its House counterpart would effectually terminate the Home Affordable Modification Program (HAMP) - has received less attention but is progressing nonetheless. Pundits insisted such legislation would fall flat in the Senate, but members of the chamber's Banking Committee are pushing their bill forward on the argument that the free market, on its own, is working where government programs are faltering.
Thursday, March 17, 2011
Congressional Panel Report Says Foreclosure Mitigation "Largely Failed"
The final report released Wednesday by the Congressional Oversight Panel (COP) paid special attention to foreclosure prevention initiatives, particularly the Home Affordable Modification Program. The COP analyzed several foreclosure mitigation efforts that have been implemented since as far back as 2007, and made it very clear that none of the programs have been as successful as hoped, mainly because of poor planning, poor regulation, and poor data collection. The report focuses uses of money under the Troubled Asset Relief Program (TARP) paid special attention to foreclosure mediation programs, particularly the Home Affordable Modification Program (HAMP). http://cop.senate.gov/images/button-readreport.gif
The report says “The TARP is now widely perceived as having restored stability to the financial sector by bailing out Wall Street banks and domestic automotive manufacturers while doing little for the 13.9 million workers who are unemployed, the 2.4 million homeowners who are at immediate risk of foreclosure, or the countless families otherwise struggling to make ends meet.”
After pointing out that the federal government is not an official sponsor of the HOPE NOW alliance, the COP says that while the alliance reports it has modified more than 3 million loans, little information is available about the actual savings the modifications are providing to homeowners.
Of the HOPE for Homeowners program that was established in July 2008, the COP says it “managed to refinance only a handful of loans,” most likely because the program had “poor initial design, lack of flexibility, and … [relied] on voluntary principal write-downs, which lenders were very reluctant to make.”
The report says “The TARP is now widely perceived as having restored stability to the financial sector by bailing out Wall Street banks and domestic automotive manufacturers while doing little for the 13.9 million workers who are unemployed, the 2.4 million homeowners who are at immediate risk of foreclosure, or the countless families otherwise struggling to make ends meet.”
After pointing out that the federal government is not an official sponsor of the HOPE NOW alliance, the COP says that while the alliance reports it has modified more than 3 million loans, little information is available about the actual savings the modifications are providing to homeowners.
Of the HOPE for Homeowners program that was established in July 2008, the COP says it “managed to refinance only a handful of loans,” most likely because the program had “poor initial design, lack of flexibility, and … [relied] on voluntary principal write-downs, which lenders were very reluctant to make.”
Wednesday, March 16, 2011
Geithner Backs New Financing Approach for Mortgages
Treasury Secretary Timothy F. Geithner yesterday backed legislative efforts to create a new market for financing mortgages that would help wean the $10.6 trillion U.S. mortgage market from government support, Reuters reported yesterday. Geithner testified before the Senate Banking Committee that he endorsed efforts to create a market for covered bonds, which are securities issued by banks and backed by pools of loans. That is different from the current mortgage system, in which lenders sell many of the loans they make to Fannie Mae and Freddie Mac, which then repackage them as securities for investors. The Federal Deposit Insurance Corp. has warned that a covered bond system could put its bank deposit insurance fund at increased risk for losses because the investors would have seniority over the agency in the event of default. Geithner said such concerns were legitimate and would have to be worked out.
http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=482a3e7b-b029-4711-8881-b2dad0b2f1b3
In related news, the Obama administration issued two veto warnings yesterday on bills to kill government housing programs that Republicans plan to take up in the House today, CongressDaily reported today. The bills would end the administration's main modification program, the Home Affordable Modification Program, and eliminate $1 billion remaining in the Neighborhood Stabilization Program, a program for rehabilitating foreclosed homes. The bills are expected to pass the House but are unlikely to be taken up in the Senate, where Democrats have largely sought to improve foreclosure-mitigation efforts rather than abandon them.
http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=482a3e7b-b029-4711-8881-b2dad0b2f1b3
In related news, the Obama administration issued two veto warnings yesterday on bills to kill government housing programs that Republicans plan to take up in the House today, CongressDaily reported today. The bills would end the administration's main modification program, the Home Affordable Modification Program, and eliminate $1 billion remaining in the Neighborhood Stabilization Program, a program for rehabilitating foreclosed homes. The bills are expected to pass the House but are unlikely to be taken up in the Senate, where Democrats have largely sought to improve foreclosure-mitigation efforts rather than abandon them.
Wednesday, March 2, 2011
House Subcommittees Examine Termination of HAMP, Effect of Dodd-Frank on Small Businesses
House Subcommittees Examine Termination of HAMP, Effect of Dodd-Frank on Small Businesses
The House Financial Services Subcommittee on Insurance, Housing & Community Opportunity will hold a hearing today titled "Legislative Proposals to End Taxpayer Funding for Ineffective Foreclosure Mitigation Programs," while the Financial Institutions & Consumer Credit will hold a hearing titled "The Effect of Dodd-Frank on Small Financial Institutions and Small Businesses." The Insurance, Housing & Community Opportunity hearing will take place at 2 p.m. ET and information including prepared witness testimony can be found here http://financialservices.house.gov/Hearings/hearingDetails.aspx?NewsID=1782 . The Financial Institutions & Consumer Credit Subcommittee hearing will also take place at 2 p.m. ET and the witness list and further information can be found at http://financialservices.house.gov/Hearings/hearingDetails.aspx?NewsID=1779
The House Financial Services Subcommittee on Insurance, Housing & Community Opportunity will hold a hearing today titled "Legislative Proposals to End Taxpayer Funding for Ineffective Foreclosure Mitigation Programs," while the Financial Institutions & Consumer Credit will hold a hearing titled "The Effect of Dodd-Frank on Small Financial Institutions and Small Businesses." The Insurance, Housing & Community Opportunity hearing will take place at 2 p.m. ET and information including prepared witness testimony can be found here http://financialservices.house.gov/Hearings/hearingDetails.aspx?NewsID=1782 . The Financial Institutions & Consumer Credit Subcommittee hearing will also take place at 2 p.m. ET and the witness list and further information can be found at http://financialservices.house.gov/Hearings/hearingDetails.aspx?NewsID=1779
Tuesday, March 1, 2011
In the News
Termination of Foreclosure Mitigation Programs
House Financial Services - Subcommittee on Insurance, Housing and Community Opportunity
Subcommittee Hearing
Insurance, Housing and Community Opportunity Subcommittee (Chairwoman Biggert, R-Ill.) of House Financial Services Committee will hold a hearing titled "Legislative Proposals to End Taxpayer Funding for Ineffective Foreclosure Mitigation Programs."
Contact: 202-225-7502
Note: The full committee will mark up these bills March 3.
Date: Wednesday, March 2, 2 p.m.
Place: 2220 Rayburn Bldg.
Agenda:
Draft Bill - The Home Affordable Modification Program (HAMP) Termination Act
Draft Bill - The Neighborhood Stabilization Program Termination Act
Draft Bill - The FHA Refinance Program Termination Act
Draft Bill - The Emergency Mortgage Relief Program Termination Act
Termination of Foreclosure Mitigation Programs
House Financial Services Committee
Full Committee Markup
House Financial Services Committee (Chairman Bachus, R-Ala.) will mark up pending legislation.
Contact: Larry Lavender - Majority Chief of Staff at 202-225-7502
Note: The Insurance and Housing Subcommittee will hold a hearing on the bills March 2.
Date: Thursday, March 3, 10 a.m.
Place: 2128 Rayburn Bldg.
Agenda:
Draft Bill - The Home Affordable Modification Program (HAMP) Termination Act
Draft Bill - The Neighborhood Stabilization Program Termination Act
Draft Bill - The FHA Refinance Program Termination Act
Draft Bill - The Emergency Mortgage Relief Program Termination Act
Limiting Investor and Homeowner Loss in Foreclosure Act of 2010
Senate Judiciary Committee
Full Committee Markup
Senate Judiciary Committee (Chairman Leahy, D-Vt.) will mark up pending legislation and vote on pending nominations.
Contact: Bruce Cohen - Democratic Chief Counsel at 202-224-7703
Date: Thursday, March 3, 10 a.m.
Place: 226 Dirksen Bldg.
Note: S 193, S 49 and D'Agostino and Feighery nominations carried over from Feb. 17.
Agenda:
S 193 - USA PATRIOT Act Sunset Extension Act of 2011
S 49 - Railroad Antitrust Enforcement Act of 2011
S 222 - Limiting Investor and Homeowner Loss in Foreclosure Act of 2010
Caitlin Joan Halligan to be U.S. Circuit Judge for the District of Columbia Circuit
Jimmie V. Reyna to be U.S. Circuit Judge for the Federal Circuit
Mae D'Agostino to be U.S. District Judge for the Northern District of New York
John A. Kronstadt to be U.S. District Judge for the Central District of California
Vincent L. Briccetti to be U.S. District Judge for the Southern District of New York
Arenda L. Wright Allen to be U.S. District Judge for the Eastern District of Virginia
Michael Francis Urbanski to be U.S. District Judge for the Western District of Virginia
Timothy J. Feighery to be chairman, Foreign Claims Settlement Commission
Foreclosure Issues; Neighborhood Stabilization; Debit Card Fees
Federal Reserve System
Advisory Committee Meeting
Consumer Advisory Council of the Federal Reserve Board will meet to discuss foreclosure issues (focusing on loss-mitigation efforts, including the administration's Home Affordable Modification Program, servicing issues related to foreclosures, and the development of national mortgage servicing standards); neighborhood stabilization and REO issues (including issues related to the disposition of real estate owned (REO) properties, the impact of foreclosed and vacant properties on communities and neighborhood stabilization strategies); proposed rules regarding debit card interchange fees and routing .
Contact: Jennifer Kerslake at 202-452-6470
For further information: http://www.gpo.gov/fdsys/pkg/FR-2011-02-22/html/2011-3843.htm
Date: Thursday, March 10, 9 a.m.
Place: Martin Building is located on C Street, NW., between 20th and 21st Streets
House Financial Services - Subcommittee on Insurance, Housing and Community Opportunity
Subcommittee Hearing
Insurance, Housing and Community Opportunity Subcommittee (Chairwoman Biggert, R-Ill.) of House Financial Services Committee will hold a hearing titled "Legislative Proposals to End Taxpayer Funding for Ineffective Foreclosure Mitigation Programs."
Contact: 202-225-7502
Note: The full committee will mark up these bills March 3.
Date: Wednesday, March 2, 2 p.m.
Place: 2220 Rayburn Bldg.
Agenda:
Draft Bill - The Home Affordable Modification Program (HAMP) Termination Act
Draft Bill - The Neighborhood Stabilization Program Termination Act
Draft Bill - The FHA Refinance Program Termination Act
Draft Bill - The Emergency Mortgage Relief Program Termination Act
Termination of Foreclosure Mitigation Programs
House Financial Services Committee
Full Committee Markup
House Financial Services Committee (Chairman Bachus, R-Ala.) will mark up pending legislation.
Contact: Larry Lavender - Majority Chief of Staff at 202-225-7502
Note: The Insurance and Housing Subcommittee will hold a hearing on the bills March 2.
Date: Thursday, March 3, 10 a.m.
Place: 2128 Rayburn Bldg.
Agenda:
Draft Bill - The Home Affordable Modification Program (HAMP) Termination Act
Draft Bill - The Neighborhood Stabilization Program Termination Act
Draft Bill - The FHA Refinance Program Termination Act
Draft Bill - The Emergency Mortgage Relief Program Termination Act
Limiting Investor and Homeowner Loss in Foreclosure Act of 2010
Senate Judiciary Committee
Full Committee Markup
Senate Judiciary Committee (Chairman Leahy, D-Vt.) will mark up pending legislation and vote on pending nominations.
Contact: Bruce Cohen - Democratic Chief Counsel at 202-224-7703
Date: Thursday, March 3, 10 a.m.
Place: 226 Dirksen Bldg.
Note: S 193, S 49 and D'Agostino and Feighery nominations carried over from Feb. 17.
Agenda:
S 193 - USA PATRIOT Act Sunset Extension Act of 2011
S 49 - Railroad Antitrust Enforcement Act of 2011
S 222 - Limiting Investor and Homeowner Loss in Foreclosure Act of 2010
Caitlin Joan Halligan to be U.S. Circuit Judge for the District of Columbia Circuit
Jimmie V. Reyna to be U.S. Circuit Judge for the Federal Circuit
Mae D'Agostino to be U.S. District Judge for the Northern District of New York
John A. Kronstadt to be U.S. District Judge for the Central District of California
Vincent L. Briccetti to be U.S. District Judge for the Southern District of New York
Arenda L. Wright Allen to be U.S. District Judge for the Eastern District of Virginia
Michael Francis Urbanski to be U.S. District Judge for the Western District of Virginia
Timothy J. Feighery to be chairman, Foreign Claims Settlement Commission
Foreclosure Issues; Neighborhood Stabilization; Debit Card Fees
Federal Reserve System
Advisory Committee Meeting
Consumer Advisory Council of the Federal Reserve Board will meet to discuss foreclosure issues (focusing on loss-mitigation efforts, including the administration's Home Affordable Modification Program, servicing issues related to foreclosures, and the development of national mortgage servicing standards); neighborhood stabilization and REO issues (including issues related to the disposition of real estate owned (REO) properties, the impact of foreclosed and vacant properties on communities and neighborhood stabilization strategies); proposed rules regarding debit card interchange fees and routing .
Contact: Jennifer Kerslake at 202-452-6470
For further information: http://www.gpo.gov/fdsys/pkg/FR-2011-02-22/html/2011-3843.htm
Date: Thursday, March 10, 9 a.m.
Place: Martin Building is located on C Street, NW., between 20th and 21st Streets
HAMP
The House Financial Services Committee will hold a hearing March 2 and vote on legislation on March 3 that would terminate HAMP and other executive branch-run foreclosure prevention programs. Separately, the Senate Judiciary Committee will consider legislation by Sheldon Whitehouse on March 3 that would clarify authority of the bankruptcy courts to establish foreclosure mediation programs (S. 222, the Limiting Investor and Homeowner Loss in Foreclosure Act of 2010). To become law, the legislation identified above would have to be approved by committee, passed on the floor of each chamber, reconciled between the House and Senate, and signed into law by the president, so there are many more steps to go in the process.
Thursday, February 3, 2011
HAMP REACHING UNDERWATER AND MIDDLE CLASS BORROWERS: REPORT
Treasury and HUD released a new report Monday on the state of the housing market, including new metrics that provide a more granular view of the Home Affordable Modification Program (HAMP). Most program participants are moderate and middle income distressed homeowners, with a median credit score of 570, who are underwater on their mortgages. Borrowers in active permanent modifications have seen their monthly mortgage payment cut by a median of 40 percent.
http://dsnews.us1.list-manage.com/track/click?u=59816bad6939d5a7dd87e45a5&id=f23bb29437&e=31685a496f
http://dsnews.us1.list-manage.com/track/click?u=59816bad6939d5a7dd87e45a5&id=f23bb29437&e=31685a496f
HAMP MODS SLOWING, OUTNUMBERED BY REJECTIONS AND CANCELATIONS
Last week, the special inspector general for the Troubled Asset Relief Program, released a report to Congress saying servicers are not doing all they can to help facilitate the process of keeping borrowers in their homes. To date there have been 1,025,907 homeowners rejected for HAMP modifications by the eight largest servicers, and there have been 572,655 canceled trial modifications, which typically occurs because of insufficient documentation, program ineligibility, or because the borrower missed payments.
http://www.dsnews.com/articles/servicer-participation-in-hamp-slowing-mods-outnumbered-by-rejections-and-cancelations-2011-02-01
http://www.dsnews.com/articles/servicer-participation-in-hamp-slowing-mods-outnumbered-by-rejections-and-cancelations-2011-02-01
HAMP redefault Rates Low at One-Year Mark
The U.S. Treasury Department says that permanent modifications executed under the Home Affordable Modification Program (HAMP) are performing well over time. Of HAMP loan mods that became permanent in the fourth quarter of 2009, 15.3% were 90+ days delinquent one year later, according to the Treasury's latest servicer performance report, which covers data through December 2010.
By comparison, federal financial regulators' most recent Mortgage Metrics Report shows that nearly half (48.6%) of the loans modified by servicers in the first quarter of 2009 had redefaulted by the 12-month mark. HAMP loans that were modified in the third quarter of 2009 did not fare as well, falling into the 90+ day default bucket at a rate of 20.7%.
Approximately 521,600 permanent modifications were active as of the end of last year, the Treasury reports. More than 58,000 permanent modifications and 734,500 trial modifications have been canceled since the program began.
The Treasury Department's statement follows the Jan. 28 introduction of a bill in the House of Representatives that seeks to shut down HAMP. Rep. Jim Jordan, R-Ohio, told TheHill.com that HAMP was a "colossal failure," adding that the program was "one more example of why government interference in the private sector doesn't work."
SOURCE: U.S. Treasury Department
By comparison, federal financial regulators' most recent Mortgage Metrics Report shows that nearly half (48.6%) of the loans modified by servicers in the first quarter of 2009 had redefaulted by the 12-month mark. HAMP loans that were modified in the third quarter of 2009 did not fare as well, falling into the 90+ day default bucket at a rate of 20.7%.
Approximately 521,600 permanent modifications were active as of the end of last year, the Treasury reports. More than 58,000 permanent modifications and 734,500 trial modifications have been canceled since the program began.
The Treasury Department's statement follows the Jan. 28 introduction of a bill in the House of Representatives that seeks to shut down HAMP. Rep. Jim Jordan, R-Ohio, told TheHill.com that HAMP was a "colossal failure," adding that the program was "one more example of why government interference in the private sector doesn't work."
SOURCE: U.S. Treasury Department
Servicers Completed 1.24 Million Non-HAMP Loan Mods in 2010
http://www.dsnews.com/articles/servicers-completed-176-million-non-hamp-loan-mods-in-2010-2011-02-02
Though servicers seem to be having minimal success with the Home Affordable Modification Program (HAMP), final 2010 data released by HOPE NOW shows that its members completed 1.24 million proprietary loan modifications last year. That number is more than double the 512,712 HAMP modifications completed by servicers last year. HOPE NOW's data show that there were 1.06 million foreclosure sales in 2010, compared to 1.76 million total loan modifications.
Though servicers seem to be having minimal success with the Home Affordable Modification Program (HAMP), final 2010 data released by HOPE NOW shows that its members completed 1.24 million proprietary loan modifications last year. That number is more than double the 512,712 HAMP modifications completed by servicers last year. HOPE NOW's data show that there were 1.06 million foreclosure sales in 2010, compared to 1.76 million total loan modifications.
Wednesday, December 15, 2010
HAMP is A Failure
http://cop.senate.gov/documents/cop-121410-report.pdf
Today's monthly Congressional Oversight report concluded that for all intents and purposes, HAMP is a failure. Link to the report is here: http://cop.senate.gov/documents/cop-121410-report.pdf So, perhaps characterizing the program in last week's webinar as not longer having credibility in many policy circles was not too risky after all. It not only means the continued experimentation of alternative approaches - mediation etc - but a plaintiff's bar even more aggressive in its litigation strategies in the wake of the foreclosure document problem. Despite criticism of program implementation by Treasury, COP basically lays the failure of loan modification efforts at the feet of the mortgage servicers. Not at all surprising in today's environment:
A major reason [for HAMP's failure] is that mortgages are, in practice, far more complicated than a one-to-one relationship between borrower and lender. In particular, banks typically hire loan servicers to handle the day-to-day management of a mortgage loan, and the servicer's interests may at times sharply conflict with those of lenders and borrowers. For example, although lenders suffer significant losses in foreclosures, servicers can turn a substantial profit from foreclosure related fees. As such, it may be in the servicer's interest to move a delinquent loan to foreclosure as soon as possible. HAMP attempted to correct this market distortion by offering incentive payments to loan servicers, but the effort appears to have fallen short, in part because servicers were not required to participate. Another major obstacle is that many borrowers have second mortgages from lenders who may stand to profit by blocking the modification of a first mortgage. For these reasons, among many others, HAMP's straightforward plan to encourage modifications has proven ineffective in practice.
Today's monthly Congressional Oversight report concluded that for all intents and purposes, HAMP is a failure. Link to the report is here: http://cop.senate.gov/documents/cop-121410-report.pdf So, perhaps characterizing the program in last week's webinar as not longer having credibility in many policy circles was not too risky after all. It not only means the continued experimentation of alternative approaches - mediation etc - but a plaintiff's bar even more aggressive in its litigation strategies in the wake of the foreclosure document problem. Despite criticism of program implementation by Treasury, COP basically lays the failure of loan modification efforts at the feet of the mortgage servicers. Not at all surprising in today's environment:
A major reason [for HAMP's failure] is that mortgages are, in practice, far more complicated than a one-to-one relationship between borrower and lender. In particular, banks typically hire loan servicers to handle the day-to-day management of a mortgage loan, and the servicer's interests may at times sharply conflict with those of lenders and borrowers. For example, although lenders suffer significant losses in foreclosures, servicers can turn a substantial profit from foreclosure related fees. As such, it may be in the servicer's interest to move a delinquent loan to foreclosure as soon as possible. HAMP attempted to correct this market distortion by offering incentive payments to loan servicers, but the effort appears to have fallen short, in part because servicers were not required to participate. Another major obstacle is that many borrowers have second mortgages from lenders who may stand to profit by blocking the modification of a first mortgage. For these reasons, among many others, HAMP's straightforward plan to encourage modifications has proven ineffective in practice.
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