in News > Mortgage Servicing
print the content item
Federal programs designed to help homeowners facing foreclosure are spending less than anticipated, according to testimony presented before the House Financial Services Committee by Katie Jones, analyst of housing policy at the Congressional Research Service (CRS), an office within the Library of Congress.

"While Treasury anticipates that the entire $45.62 billion currently designated for the three housing programs that use [Troubled Asset Relief Program] funds will be spent, a November report from the Congressional Budget Office estimates that only $12 billion in TARP funds will ultimately be spent on these programs," Jones reported.

Jones noted that as of Feb. 25, $1 billion in Home Affordable Modification Program (HAMP) funding was disbursed, primarily as "incentive payments to mortgage servicers, borrowers and investors in connection with first-lien modifications" for mortgages not connected to the government-sponsored enterprises. She noted that servicers and borrowers could continue to receive HAMP-based incentives even if the program is discontinued as part of the current attempts to reduce the federal deficit.

"Mortgage servicers can receive 'pay-for-success' incentive payments of $1,000 per year for up to three years, and borrowers can receive pay-for-success incentive payments of $1,000 per year for up to five years in the form of principal reduction, if the borrower remains current on the modified mortgage payments," Jones said. "In other words, certain HAMP incentive payments are designed to be paid based on the future success of servicer actions in the past. For this reason, Treasury may continue to have a contractual obligation to pay servicers for their past performance under (or reliance on) the HAMP program, even if new legislation is enacted to terminate the program before its currently scheduled end date."

As for other foreclosure programs, Jones noted that the Federal Housing Administration Short Finance program, which was designated to receive up to $8.12 billion, has only refinanced 40 loans since the program began in September 2010, while the Emergency Homeowners' Loan Program, which was part of the Dodd-Frank Act, has yet to take applications. She noted that $3.9 billion was provided to fund Section NSP-1 of the Neighborhood Stabilization Program, which was established in the Housing and Economic Recovery Act of 2008, but this program section has only assisted 19,189 housing units as of Jan. 13.

SOURCE: House Financial Services Committee


Interthinx has Your Blueprint for Quality_1375


Latest Top Stories

Uniting For Quality Appraisals

How AMCs and appraisers are collaborating to ensure accurate, quality property valuations.


Five Things Servicers Can Do Now To Improve Customer Satisfaction

It's a worthy goal, not just because it will satisfy regulators but also because it can yield measurable savings for the servicer's contact center.


Fannie, Freddie Lower Down Payment Requirements

The GSEs are now accepting conventional mortgages with a down payment of as little as 3%.


Zillow: First-Time Home Buyers Will Lead Recovery In 2015

Stan Humphries, chief economist for Zillow, says he expects "the allure of fixed mortgage payments and a more stable housing market will entice many more otherwise content renters into the housing market."


New Home Sales Rose Slightly In October

It was the fifth consecutive month that the U.S. Census Bureau and U.S. Department of Housing and Urban Development downwardly revised the previous month's new home sales estimate.

Urban Lending_id1351
Hse SandyHook
Industry Resource
Orb Mobile
SWBC_id1313
MBA-TX_id