The House Committee on Oversight and Government Reform has launched an investigation into federal foreclosure mitigation programs, committee chair Ed Towns, D-N.Y., informed Treasury Secretary Tim Geithner in a letter dated Feb. 4.
The investigation is based on the committee's concerns that servicers have been inconsistent in their application of the Home Affordable Modification Program (HAMP) and unclear in communicating with eligible homeowners, Towns says. The letter to Geithner cites government reports that found the Treasury has ‘yet to embrace full transparency and accountability’ for Making Home Affordable (MHA), HAMP and related programs.
"For example, it is my understanding that Treasury has thus far refused to reveal in detail how it defines ‘net present value"â�¦. Moreover, if a homeowner is denied a permanent mortgage modification, the specific reasons for the denial are not revealed. Finally, Treasury has not established a process for homeowners to appeal the denial of a permanent mortgage modification," Towns wrote in his letter.
Towns' letter includes more than 30 specific inquiries about the government's foreclosure prevention programs, and Towns has asked that Geithner respond by Feb. 18.
Towns asks about, among other topics, the number of in-house staff and contracted staff working with Fannie Mae and Freddie Mac in relation to MHA, the ‘second look’ review program that Treasury and Freddie Mac announced late last year, details on the NPV model, explanations of each MHA denial code, and the results of MHA subprograms (including the foreclosure-alternatives spin off, Hope for Homeowners, the refinance arm of MHA, and the second-lien program).