Troubled Asset Relief Program: Results of Housing Counselors Survey on Borrowers' Experiences with the Home Affordable Modification Program

To restore stability and liquidity to the financial system, Congress established the $700 billion Troubled Asset Relief Program (TARP) and directed the Department of the Treasury (Treasury) to use the authorities granted under TARP to, among other things, preserve homeownership and protect home values. In February 2009, Treasury announced that up to $50 billion in TARP funds had been allocated to help struggling homeowners avoid potential foreclosure. However, the number of borrowers facing potential foreclosure has remained at historically high levels. In fact, in the first 2 years of the TARP-funded Home Affordable Modification Program (HAMP), more borrowers were denied or canceled from trial loan modifications than were given permanent modifications. In three prior reports, we looked at the implementation of HAMP and made several recommendations that were intended to address the challenges that Treasury faced in implementing the program. To better understand the experience of borrowers seeking HAMP modifications, we conducted a Web-based survey of housing counselors through the National Foreclosure Mitigation Counseling Program (NFMC) to obtain the counselors' perspectives of borrowers' experiences with HAMP. NFMC is administered by NeighborWorks America and funds approximately 130 grantees and 1,700 subgrantees to conduct foreclosure mitigation counseling. We reported on some of the survey's findings in our March 2011 report but expand on them in this correspondence. The survey was designed to obtain information on (1) borrowers' overall experiences with HAMP, (2) HAMP trial modification denials, (3) HAMP trial modifications, (4) the HAMP Solution Center, (5) ways Treasury could improve HAMP, and (6) proprietary (non-HAMP) modifications. This correspondence summarizes the results of each of the six survey segments. The survey and a more complete tabulation of the results from 396 counselors can be viewed at GAO-11-368SP..