The Last Days of the Home Affordable Modification Program

"When the Obama administration announced a massive effort to help distressed homeowners in 2009, it set high expectations. The program, government officials said, would keep up to 4 million borrowers out of foreclosure," according to an article by Renae Merle.

Six years later, and seemingly eons removed from the fear provoked by the housing crisis of the Great Recession, the Home Affordable Modification Program accepted its final applications earlier this week. "About 1.6 million borrowers have seen their mortgage payments lowered through the program so far, but about a third of those people eventually fell behind on their payments again," writes Merle.

The gap between HAMP's goals and its achievements is sizable, and there is plenty of blame to go around:

…the effort has been bedeviled by complaints that banks repeatedly lost homeowners’ paperwork or incorrectly told them that they didn’t qualify for help. The Treasury Department didn’t act quickly enough to force banks to abide by the rules of the program, housing advocates have said. Nearly 70 percent of the homeowners who applied for the program were rejected, according to government data.

A 2014 report even found evidence that Black and Hispanic borrowers faced discrimination by HAMP. Those are not the troubling accusations leveled at the banking industry in the article, but banks will continue to receive billions in incentive payments after the program expires, despite having repeatedly broken the rules of the program.

Merle's coverage also pivots to a discussion of the accomplishments of the Home Affordable Refinance Program (HARP), which has also fallen short of targets and has been extended several times. HARP is set to expire in September 2017.