When the Obama administration announced the Home Affordable Modification Program (HAMP) in 2009, officials estimated 3 to 4 million borrowers would seek relief from their mortgages through the program during the worst recession and housing market collapse in decades.  More than two years later, however, those projections have proven to be optimistic, to say the least.  Mired in extensive paperwork, lost documentation, costly time delays, and extreme frustration on the part of the Chester County PA home owners attempting to participate, the program has been examined, monitored, revised over and over to make the process a smoother and more successful one.  A daunting task, however; the most recent report by the Office of the Special Inspector General for the Troubled Asset Relief Program SIGTARP) devoted over 15 pages to a description of procedures, requirement, and changes involved with the program!

Originally designed to help financially struggling owners of Chester County PA homes avoid foreclosure by modifying their loans to a level that is both affordable and sustainable, HAMP’s success is uncertain—or at least arguable.  Critics charge that only 700,000 owners have actually benefitted from the program and claim that while the Treasury initially committed $75 billion of Troubled Asset Relief Program funds to the HAMP initiative, it now appears it will spend only $4 billion on HAMP incentives.

The members of the Congressional Oversight Panel even stated that government’s loan modification program was “ineffective,” and they claimed that the Treasury’s reluctance to address flaws of the program has had “real consequences.”  Their report also states that the Treasury has failed to hold loan servicers accountable when they have repeatedly lost borrower paperwork or refused to perform loan modifications. And TARP has stated “The program has been beset by problems from the outset and, despite frequent retooling, continues to fall dramatically short of any meaningful standard of success."

There are, of course, success stories, and supporters point out that the 700,000 approved loan modifications mean that many fewer foreclosures.  They urge financially-strapped home owners to fully investigate the program, get help to complete the sometimes grueling process, and use websites specifically designed for the potential applicant.  They also maintain that eligible homeowners entering HAMP have a high likelihood of earning a permanent modification and realizing long-term success. The rate of modifications moving from trial to permanent is up to 74 percent, and the average time to convert from a trial to permanent modification is down to 3.5 months.