David Dayen | HUD Continues Defense of Allowing HAMP Modifications as Part of the Foreclosure Fraud Settlement
HUD Continues Defense of Allowing HAMP Modifications as Part of the Foreclosure Fraud Settlement
The pushback from the Administration on one particular story arising from the foreclosure fraud settlement has been pretty intense. You cannot say that Shahien Nasiripour doesn’t have the attention of HUD.
Today, they devoted an entire blog post (unsigned, from “HUD Public Affairs”) to refuting Nasiripour’s story in the Financial Times (which they don’t link, so I will) about how bank servicers can count HAMP modifications toward the “credits” in the foreclosure fraud settlement. But really they only refute the title of Nasiripour’s story:
The article, entitled “US taxpayers to subsidise $40 bn housing settlement,” argues that there is a taxpayer subsidy because modifications performed under the Treasury’s Home Affordable Modification Program (HAMP) are eligible for credit under the settlement.
In reality there is no such subsidy. Servicers cannot use HAMP incentives to meet their obligations under the settlement, plain and simple.
This does not refute Nasiripour’s story, which includes this very point from Administration officials:
Federal officials involved in negotiating the settlement defended the arrangement, pointing out that the amount reimbursed to the banks could not be directly used towards fulfilling settlement obligations.
Andrea Risotto, Treasury department spokeswoman, said this system “leverages a way to help more people”.
Check out the rest here…