Nobody knows how many, but a great many homeowners apparently followed that bad advice, skipping a mortgage payment or two (or a half-dozen) in order to qualify for HAMP. They were put into “trial” modifications and given a new, lower mortgage payment to make. On a “trial basis.”
When the time came around for a permanent modification, many of these homeowners were rejected. The paperwork is a bureaucratic nightmare, and it’s easy to find an error in the documentation, especially if you’re looking for one. Or for the mortgage servicers to “lose” documents. Complaints about this have been rife. In the worst-case scenarios, borrowers who intentionally fell behind on their mortgages found themselves suddenly facing huge bills — late fees, back payments to make up the difference on the reduced mortgages, etc. — due all at once. Most of these people didn’t have a lot of money in savings, naturally, seeing as how they were struggling to pay their mortgages. So the mortgage servicers, who also earn fees from foreclosures, collected their HAMP subsidies and then had a much easier time proceeding to accelerated foreclosures.
HAMP, in other words, is worse than a multibillion-dollar waste of our money: It’s a rip-off, perpetuated by the very same people who have been ripping us off for years.
Kill it. Kill it dead.
— Kevin D. Williamson is a deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism,just published by Regnery. You can buy an autographed copy through National Review Online here.