–White House: Obama Likely to Veto Any Legislation Ending HAMP

By Brai Odion-Esene

WASHINGTON (MNI) – The White House and U.S. Treasury Department
Tuesday mounted a fierce defense of the administration’s mortgage loan
modification initiatives, and made it clear they oppose legislation
being considered in the House that would terminate the program.

The Republican-dominated House is set to consider legislation
Tuesday that would terminate the Home Affordable Modification Program,
and Tim Massad, Treasury’s acting assistant secretary for financial
stability, said, “We strongly oppose these efforts.

“It would not make things better; it would make them worse,” Massad
argued in remarks prepared for delivery to Harvard University’s John F.
Kennedy School of Government.

Massad, the Treasury official who was responsible for the Troubled
Asset Relief Program, said HAMP “continues to provide much needed help
to tens of thousands of new families each month.”

Fixing the housing crisis, is going to take hard work, sustained
effort, and bipartisan cooperation, he said. “Terminating HAMP is
certainly not the answer.”

In fact doing so would exacerbate matters, he warned, as it would
immediately ease the pressure on mortgage companies to do more to help
struggling borrowers, “creating unnecessary hurdles for those seeking
relief.”

“More broadly, it would remove a critical path to recovery for tens
of thousands of American families and for our overall economy,” Massad
said.

In a separate by the Office of Management and Budget Tuesday, the
Obama administration said it “strongly opposes” House passage of H.R.
839, which would eliminate HAMP.

“This program offers eligible homeowners an opportunity to lower
their mortgage payments, helping individuals avoid foreclosure and
leading to the protection of home values and the preservation of
homeownership,” the statement said.

It added that as tens of thousands of responsible American
homeowners struggling with their mortgages receive permanent assistance
each month from HAMP, “the Administration believes that continuation of
HAMP is important to the Nation’s sustained economic recovery.”

“If the President is presented with H.R. 839, his senior advisors
would recommend that he veto the bill,” the OMB warned.

Massad said approximately 25,000 to 30,000 new homeowners receive
modifications each month, adding that a reduced monthly payment for
these families “is the difference between keeping their homes and
foreclosure.”

In addition, Massad said, HAMP has helped to establish important
industry-wide standards — resulting in two million additional loan
modifications outside of the program.

Acknowledging the criticism that the program has received from all
corners, that it has not helped as many borrowers as the administration
originally estimated, Massad said this is because of the program’s
“prudent eligibility criteria.”

“HAMP has been carefully designed to protect limited taxpayer
resources,” he said, “and the program’s budgeted funds that are not
spent for permanent modifications must be used to pay down the national
debt.”

Another difficulty HAMP has encountered is the poor performance by
mortgage servicers, and Massad announced a new step aimed at encouraging
greater compliance.

Starting in April, the Treasury’s quarterly compliance reporting
will include a scorecard for each of the largest HAMP servicers, he
said.

The scorecard will highlight servicer compliance on a number of
performance metrics, including proper evaluation of homeowners for
modifications, resources dedicated to HAMP implementation and quality
control.

“Mortgage servicers companies will also be rated against their
peers,” Massad said.

** Market News International Washington Bureau: (202) 371-2121 **

[TOPICS: M$U$$$,MFU$$$,MGU$$$,M$$AG$]