According to the United States Government Accountability Office ("GOA"), the 133 loan servicers who have contracted with the government to perform loan modifications under the guidelines and "mandatory" directives of the Home Affordable Mortgage Program [HAMP], have already received $36.9BILLION of the $50BILLION in TARP funds set aside for the program. Contemplate the irony...taxpayers have paid loan servicers $36.9BILLION to date to disregard HAMP guidelines and, more often than not, screw over homeowners if financial distress.

This is nothing that we and borrowers don't already know...but see for yourself:

http://www.gao.gov/new.items/d10556t.pdf

Highlights:

When Treasury announced the program in March 2009, it estimated that HAMP could help 3 to 4 million borrowers. Through February 2010, including both the portion funded by TARP and the portion funded by Fannie Mae and Freddie Mac:

                        about 1.1 million borrowers had begun trial modifications; of which

                        about 800,000 were in active trial modifications, and

                        fewer than 200,000 permanent modifications had been made.

As of early March 2010, the TARP-funded portion of the program had 113 participating servicers, and about $36.9 billion of the $50 billion in TARP funds for HAMP had been allocated to these servicers. A typical TARP-funded modification could result in a monthly mortgage payment reduction of about $520.

Treasury has taken some steps, but has not fully addressed concerns that GAO raised in its July 2009 report on HAMP's transparency and accountability. For example, Treasury has yet to finalize some key components of its internal controls over the first-lien program, including establishing metrics and benchmarks for servicers' performance. In addition, Treasury has not finalized remedial actions, or penalties, for servicers not in compliance with HAMP guidelines. According to Treasury, these remedies will be completed in April 2010. Lastly, GAO reported that Treasury's projection that 3 to 4 million borrowers could be helped by HAMP was based on several uncertain assumptions and might be overly optimistic, and GAO recommended that Treasury update this estimate, but the Department has not yet done so.

Preliminary results of GAO's ongoing work show inconsistencies in some aspects of program implementation. Although one of HAMP's goals was to ensure that mortgage modifications were standardized, Treasury has not issued specific guidelines for all program areas, allowing inconsistencies in how servicers treat borrowers. For example, the 10 servicers GAO contacted had 7 different sets of criteria for determining whether borrowers who were not yet 60 days delinquent qualified for HAMP. Also, some servicers were not systematically tracking all HAMP complaints and, in some cases, tracked only resolutions to certain types of complaints, such as written complaints addressed to the company president. GAO also found that servicers faced challenges implementing HAMP because of the number of changes to the program, some of which have required servicers to readjust their business practices, update their systems, and retrain staff.

The report reflects the reality on the front lines.  Servicers have no incentive to help homeowners in financial distress.  There is no penalty for lack of compliance with HAMP guidelines.  The Treasury Department is doing nothing to act as a watchdog, yet continues to write checks to the servicers.

I renew my call for a private cause of action.  Homeowners need access to the Courts to hold loan servicers accountable.  Leaving HAMP guideline enforcement up to Fannie Mae has failed.  The crisis has worsened and its cost taxpayers $37Billion to date.

After earning unprecedented wealth in creating the foreclosure crisis, how is it that taxpayers must now pay lending industry players BILLIONS for their failed efforts to implement HAMP and mitigate the crisis that they created?

In what other industry can you create a crisis and be so well paid to do such a terrible job attempting to fix the crisis?

Its an extreme case of the fox watching the chickens...in this case, we are talking about a very well paid fox.