The HAMP Termination Act of 2011

Floor Speech

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Ms. WATERS. Mr. Chairman, I rise in strong support of my amendment, which is a commonsense provision that provides transparency and clarity for distressed homeowners.

My amendment would require the Secretary of the Treasury to send a letter to HAMP applicants that they will not be considered for a modification due to termination of the program, and that they can contact their Member of Congress for assistance in negotiating with or acquiring a loan modification from their servicer.

I raise this amendment because my friends on the opposite side of the aisle have the majority in the House, and they will probably prevail on this amendment; but I think that we have a responsibility to say to our constituents what we are doing and what we are not doing.

Many of them have just begun to learn about the loan modification program, the HAMP program, and all of a sudden it is going to be pulled out from under them if this amendment prevails and if it passes on the opposite side of the aisle and in the Senate, et cetera; and the constituents need to know exactly what we have done.

Now, I worked with Mr. McHenry on this amendment and we worked out some language that he thought was fair, and I believe we do have his support. That is not to say that I support the bill because I don't support this amendment. I don't support this bill that would literally dismantle the HAMP program.

Yes, there are criticisms about this program. I and others would have liked for it to have been broader, for it to have helped more people. But don't forget, over 600,000 people have been helped. I know the target was 3 million to 4 million people, and we certainly haven't come close to that.

But to do away with this program would leave the American taxpayers who have gotten into loans, oftentimes tricked into these loans, misled into these loans by the loan initiators, the banks and the mortgage companies that told them that they could help them get a mortgage even though these were exotic products, these were teaser loans, these were no doc loans, these were loans that were going to reset and cause the taxpayer to be in a loan that they could not afford.

Many innocent people trying to live the American Dream signed on the dotted line. And also there was a lot of fraud involved where some of these loan initiators signed on the dotted line for the homeowner or the would-be homeowner. And so we have this crisis, this subprime crisis that we have been going through, and there is a lot of misery out there, people who were just trying to own a home who now find themselves in foreclosure.

The banks were not helping with loan modification, so we had to come up with something. The administration came up with the HAMP program. It is a voluntary program. But they signed on to these agreements with the banks to say that they would do loan modifications under certain conditions. And the administration had to do this because the banks were not helping out the homeowners. As a matter of fact, the banks said: Well, we don't have anything to do with this anymore. It is up to the servicers.

What a lot of people don't know is who is the servicer. The servicer is simply in most cases a company that is owned by the bank. They own their own servicing company, which means that once the mortgage is signed on by the homeowner, they now give it to this other company that they own, these servicers; and the servicers have the responsibility for collecting on the mortgage, for collecting on late fees, for collecting on attorney fees, and for doing loan modifications. But the homeowners couldn't get to them. HAMP is supposed to help them get to them.

These servicers have gotten away with being unregulated for all of these years. As a matter of fact, there are no standards for servicers. If you call one bank, they will send you to their loss mitigation department. What they don't tell you, banks such as Bank of America, their loss mitigation is an offshore operation. You may be talking to somebody in India who has got this little cookie-cutter sheet which says: How much money do you make? How many times have you been late on your payment? Let's figure out how not to give you a loan modification, but maybe to give you a few months to catch up. But loss mitigation means a lot of different things in all of these different banks, if you are lucky enough to get to the servicer.

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