Struggling homeowners will be able to receive mortgage assistance for two more years under the Obama Administration’s Home Affordable Modification Program (HAMP).
The decision was met by some opposition from house Republicans this week.
During a hearing Wednesday held by the House Committee on Financial Services, Chairman Jeb Hensarling (R-TX) expressed his strong opposition to the decision to extend HAMP.
“This decision solidifies the Obama administration’s place atop the list of the nation’s biggest subprime lenders,” said Chairman Hensarling.
A program that has helped nearly 1.3 million homeowners since its inception in March 2009, the Administration announced this week it would extend HAMP through December 31, 2015. The program’s previous expiration was set for December 31, 2013.
Criticism toward HAMP has been that the program causes more harm than good, according to a report from the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
“The longer a homeowner remains in HAMP, the more likely he or she is to re-default out of the program,” said Hensarling, citing SIGTARP’s report, which also states that re-defaulted HAMP modifications often inflict great harm on already struggling homeowners.
Despite criticism, supporters believe that while the housing market is making its way toward a full recovery, HAMP is able to keep homeowners away from foreclosure.
“The housing market is gaining steam, but many homeowners are still struggling,” said Treasury Secretary Jacob J. Lew. “Extending the program for two years will benefit many additional families while maintaining clear standards and accountability for an important part of the mortgage industry.”
As of March 2013, more than 1.1 million homeowners have received a permanent modification of their mortgage through HAMP, translating into an average savings of $546 each month, according to the Obama Administration.
“The Making Home Affordable Program has provided help and hope to America’s homeowners,” said Shaun Donovan, secretary of the Department of Housing and Urban Development. “And with this extension, we ensure that the program keeps supporting communities for years to come.”
Written by Jason Oliva