The HAMP Termination Act of 2011

Floor Speech

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Ms. HIRONO. Mr. Chair, I rise in strong opposition to H.R. 839, the Home Affordable Modification Program (HAMP) Termination Act.

The House majority supports H.R. 839 and other bills that would end new and existing foreclosure mitigation programs, turning their backs on the middle class families in our country.

Instead of coming up with practical ways to improve these programs, or establishing new initiatives that assist homeowners and stabilize the housing market, my colleagues on the other side of the aisle support immediate termination of these programs without working to address the housing crisis and its effect on the nation's economy.

Most of us would agree that HAMP has not been nearly as successful as initially hoped. Since this program started, about 5 million foreclosures have been completed. HAMP is far from reaching the targeted goal of assisting 3 to 4 million homeowners: nearly 1.5 million homeowners have received a trial HAMP modification, but only about 600,000 have had their mortgages permanently modified under HAMP.

On March 28th, fifty of my colleagues and I sent a letter to Treasury Secretary Geithner to share our concerns about HAMP, including (1) establishing a single point of contact requirement for mortgage servicers; (2) suspending the foreclosure process when the borrower makes a request for a loan modification; (3) providing for an independent review of loan modification denials; and (4) urging the Treasury Department to begin levying fines and penalties against servicers who fail to follow program rules. These reforms are essential to ensure that HAMP becomes a more successful and effective program.

While HAMP has been far from perfect, the program has had its share of successes. About 30,000 additional homeowners are receiving a permanent HAMP modification every month.

Moreover, the Office of the Comptroller of the Currency reports that the re-default rate for the program's permanent modifications at six months was about half that of other modifications, and nearly 85 percent of homeowners who received a permanent HAMP modification remain in their modification a year later. This program has also set important mortgage industry standards to address the magnitude of this housing crisis and ensure that struggling homeowners get the help that they need to stay in their homes.

If it were not for HAMP, there is no question that even more homes in my congressional district would have been subject to foreclosure. A constituent from Hilo on the island of Hawaii contacted me desperate for assistance. At 72 years old, he has a medical condition and lives on a fixed income. This constituent has no substantial debt and put in over $300,000 of his savings into his home. His bank ignored his pleas for help, and he was on track to getting a foreclosure notice until he received assistance from HAMP.

Another constituent, a disabled veteran living in Volcano on the island of Hawaii, tried for over two years to get help from her lender, to no avail. It was only as a result of the Making Home Affordable foreclosure prevention services that she was able to get a permanent loan modification, which saved her $500 a month and lowered her interest rate by over two percentage points.

These are only two of the personal and heart-wrenching stories that I've heard from people in my congressional district who are struggling to stay in their homes. The bottom line is that HAMP provides yet another lifeline for these families. Terminating HAMP would effectively end a lifeline to tens of thousands of homeowners.

I urge my colleagues to vote against this misguided bill.

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