The next chairman of the House Oversight and Government Operations Committee wants to redirect nearly $30 billion committed to the Home Affordable Modification Program, using the money to help borrowers that failed at getting a loan modification.
Rep. Darryl Issa, R-Calif., contends servicers and lenders are willing to perform loan modifications without the monetary incentives provided by the HAMP program, which has the strong backing of the White House.
The Congressman told the Treasury Department official in charge of HAMP, Phyllis Caldwell, that he wants to "figure out a way to use these funds better."
Treasury has already paid nearly $700 million to residential servicers for completing 500,000 HAMP modifications. Moreover, these servicers are entitled to collect an annual "success" payment over five years if the borrower remains current on the modified loan.
Rep. Issa is expected to conduct extensive oversight hearings on the HAMP and the Troubled Asset Recovery Program when he becomes chairman of the powerful oversight panel in January. The HAMP program is funded using TARP money.
The California Republican complimented Caldwell on her efforts to make HAMP work. "You have been ingenious in trying to improve it over time," he said. "It started off as a terrible program and now it is only a program we are not sure does us any good."
