Two dozen House Democrats Wednesday slammed the Obama administration's effort to reduce home foreclosures, saying it has "fallen drastically short of expectations."
The members criticized Treasury Secretary Timothy Geithner for presiding over a foreclosure crisis that has worsened since he took office in 2009.
The members said the administration should consider major new programs to improve the housing market. The members said they have concerns that the administration will be able to improve the $75 billion Home Affordable Modification Program (HAMP), which originally aimed to help 3 million or 4 million homeowners. A report Tuesday from the special inspector general over the $700 billion financial bailout program criticizes the program, saying it relies on "meaningless" metrics.
The program has resulted in 170,000 permanent loan modifications, which represents roughly 13 percent of the total trial offers extended to borrowers. The Treasury Department defended the program, saying it is working on improvements and is focused on steps and modifications that could reduce foreclosures.
"We applaud this effort, but we are skeptical that it will achieve the results needed," the lawmakers wrote. "The government's failure to take effective actions to manage the avalanche of home foreclosures is one of the great public policy failings of our time."
The members are calling on a new program modeled on the Great Depression-era Home Owners Loan Corporation (HOLC) that could purchase mortgages outright instead of relying on servicers to voluntarily modify loans.
The letter was signed by Democratic Reps. Brad Miller (N.C.), Keith Ellison (Minn.), Charles Gonzalez (Texas), Maurice Hinchey (N.Y.), Steve Cohen (Tenn.), William Lacy Clay (Mo.), John Dingell (Mich.), John Sarbanes (Md.), Lynn Woolsey (Calif.), Raul Grijalva (Ariz.), Linda Sanchez (Calif.), Alan Grayson (Fla.), Joe Baca (Calif.), Gregory Meeks (N.Y.), Judy Chu (Calif.), Betty Sutton (Ohio), Marcy Kaptur (Ohio), Bob Filner (Calif.), David Scott (Ga.), Dina Titus (Nev.), Marcia Fudge (Ohio), Bill Delahunt (Mass.) and Maxine Waters (Calif.), as well as Del. Eleanor Holmes Norton (D.C.).
Republicans, including Reps. Darrell Issa (Calif.) and Jim Jordan (Ohio), have also slammed the administration's record on reducing foreclosures.