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Published: January 2010

Improving HAMP will stem foreclosures

Coalition: Financial Reform

In a letter to Tina Tchen, White House Director of Office of Public Engagement, Consumer Action and other groups laid out steps to improve the Home Affordable Modification Program (HAMP).

Below is an excerpt from the letter:

Thank you for inviting us in last month to talk with you and your colleagues about our organizations’ concerns about the foreclosure crisis and our ideas about steps the Obama Administration can take to address it.  As you heard, many constituencies have been deeply affected by this devastating problem, including people and communities of color, seniors, and – increasingly – workers who have lost their jobs or are suffering reduced hours and pay.  Until we stem the tide of foreclosures, the housing market will remain unstable and threaten the larger economic recovery.

We commend the Administration for acknowledging that the government has a critical role to play in solving the foreclosure crisis.  We applaud the range of tools that have been applied, including low interest rates, the power of the GSEs, and the expansion of FHA lending, among others.  In particular, we welcomed the launch of the Making Home Affordable program, and many of us have worked closely with the Treasury Department over much of last year to maximize its effectiveness.  However, we have grown increasingly concerned that HAMP as currently constructed and administered cannot prevent the millions of foreclosures that are anticipated over the next few years.  Additional measures are needed to bring this crisis under control.

In the December 18 meeting, we discussed a number of steps that must be taken to make HAMP work better.  These include:

1. Stop all foreclosure actions while borrowers are being evaluated for HAMP loan modifications. 

2. Protect borrowers from the negative impact of servicers’ processing delays. 

3. Institute an independent appeals process for borrowers who believe their HAMP application was not handled properly.

4. Increase transparency in HAMP. 

5. Allow borrowers more than one bite at the apple.

6. Provide access to HAMP for homeowners in bankruptcy.

7. Working more closely with housing counselors and borrowers’ attorneys.

We believe that we share a common set of goals: stopping the foreclosure crisis and restoring stability to families, communities, and the housing market.  We look forward to working with you and your colleagues to achieve these goals.  If there are proposals we have outlined that you have already considered and rejected, we would find it very helpful to understand the obstacles you see to their adoption. Similarly, it would be helpful for us to know which of the ideas we have proposed are under active consideration by the Administration, what the timeline is for moving forward on these issues, and how we can best work with you to  prevent millions of families from experiencing the devastation brought about by foreclosure.

Lead Organization

Americans for Financial Reform

Other Organizations

Americans for Financial Reform | California Reinvestment Coalition | Center for American Progress | Center for Responsible Lending | Community Legal Services of Philadelphia | Consumer Federation of America | Greenlining Coalition | Leadership Conference on Civil and Human Rights | National Association of Consumer Bankruptcy Attorneys | National Coalition for Asian Pacific American Community Development (CAPACD) | National Community Reinvestment Coalition | National Consumer Law Center (on behalf of its low income clients) | National Council of La Raza | National Fair Housing Alliance | National Urban League Policy Institute | Philadelphia Unemployment Project | PICO National Network | Service Employees International Union

More Information

Making Home Affordable

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