Why does HAMP help and hinder?  Simple.  Borrowers hope and believe that HAMP will somehow resolve their mortgage woes when in fact it can exasperates them but slowing the foreclosure process without resolving an inability to make the payments.

HAMP tends to instill false hope in borrowers many of who soon find out either:

a)     they have been denied for a permanent modification even after making their payments;

b)    they have stopped making payments because they were told to and now can’t catch back up.

-       The Bank Slayer

Elizabeth Warren’s Report:

The December report of the Congressional Oversight Panel presents a finding that the TARP (Troubled Asset Relief Program) overall assisted in preventing a bigger crisis, but it created more challenges and encouraged risk-taking.

Earlier reports mentioned the abysmal failure of the foreclosure prevention/mortgage modification program and the government’s awareness of this failure. The panel has made recommendations to attempt to fix the issues.

However, in the December report, the following remains a key failure:

• The foreclosure crisis continues to grow.
• More than two million families have lost their homes to foreclosure since the start of this crisis.
• Countless more have lost their homes in short-sales or have turned their keys over to the lender.
• Foreclosure starts over the next five years are projected to range from 8 to 13 million.
• More than a year after TARP was passed, it appears that the TARP’s foreclosure mitigation programs have not yet achieved the scope, scale, and permanence necessary to address the crisis.

Executive Summary, Elizabeth Warren Introduces December Report