Republican Representative Jim Jordan of Ohio has introduced legislation to end the Home Affordable Modification Program (HAMP), calling it a “colossal failure.”
The HAMP program was the showcase of the Obama administration’s plan to stop foreclosures by modifying mortgages to a payment level that was affordable for distressed homeowners.
It was originally estimated that HAMP would help over 4 million homeowners but to date only approximately a half million people enrolled in the program are successfully keeping up with their payments. A majority of the participants in the HAMP program wind up redefaulting, ultimately prolonging the foreclosure mess
Proponents of HARP argue that distressed homeowners who cannot pay their mortgage should have the principal reduced to a level that is “affordable”. Critics of HARP claim that the program is attempting to keep people in homes that they simply cannot afford, at the expense of homeowners who responsibly borrowed only what they could afford in the first place.
Rep. Jim Jordan said “HAMP is a colossal failure. In many cases, it has hurt the very people it promised to help. It’s one more example of why government interference in the private sector doesn’t work and that’s why it should be repealed.”
Rep. Darrell (R-Calif), a co-sponsor of the bill to kill HAMP said “Our review and reports by SIGTARP all found this program is failing and that Treasury has gone out of its way to hide, rather than address problems. It’s unacceptable that Treasury continues this misguided effort that appears more focused on saving face than helping troubled homeowners.”
Whether the program is a success or failure, depending on your point of view, one thing is certain – government programs, once enacted, seem to take on a life of their own and continue indefinitely regardless of cost or usefulness.