Ending the Making Home Affordable (MHA) Program would increase avoidable foreclosures and put the fragile housing market in worse shape, the program's director told an audience at the SourceMedia Mortgage Servicing Conference Tuesday.
Laurie Anne Maggiano, director of policy in the Treasury Department's Office of Homeownership Preservation, defended the program that she helped create, in light of Congressional criticism that Home Affordable Modification Program (HAMP) is a 'failure and complete waste of taxpayer money,' and a House of Representatives vote to end the program.
Ending MHA would "entrust all efforts to stop foreclosure in the hands of servicers," Maggiano said, noting those same servicers are being sued by all 50 state attorneys general and criticized politically and in the press for their actions in the housing crisis.
The Treasury official acknowledged HAMP has faced its share of challenges: early on, it was slow to get started; the program was not as broadly effective as originally hoped; and servicers faced difficulties executing the program. But Maggiano said through a series of revisions and tweaks,
HAMP and MHA have improved and need more time to reach their full potential.
When it was announced in March 2009, HAMP was projected to help 3 million to 4 million borrowers obtain mortgage modifications. Two years later only 635,000 borrowers have successfully lowered their mortgage payment through the program.
But Maggiano said MHA is responsible for pushing the mortgage industry toward other private-label modification efforts, which have resulted in an additional 2 million modifications.