Tuesday, July 28, 2009

GAO Report to Congress: HAMP Needs to be More Transparent and Accountable

The U.S. Government Accountability Office (the "GAO) released its report dated July 23, 2009 to Congressional Committees entitled: "Troubled Asset Relief Program - Treasury Actions Needed to Make the Home Affordable Modification Program More Transparent and Accountable."

The GAO reports that the first-lien mortgage modification effort under HAMP "may not fully meet Treasury's goals." The GAO further states that Treasury's estimate of the number of borrowers who would likely be helped under its HAMP loan modification program "may be overstated" as it may reflect data gaps and faulty assumptions, including rates of borrower response and servicer participation. The reports also notes that Treasury has not finalized all of the processes for the implementation of HAMP and is not systematically evaluating servicers' capacity.

The report states that as of July 20, 2009, only about 180,000 borrowers have started trial modifications.
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