Grassley presses Treasury to set firm benchmarks for foreclosure assistance program

Sen. Chuck Grassley (R-Iowa) is urging the Treasury Department to set measurable goals for a housing assistance program that government oversight groups argue has failed to address the foreclosure crisis.

Grassley, ranking member of the Senate Finance Committee, sent a letter to Secretary Geithner on Friday calling on Treasury to establish specific benchmarks for its Home Affordable Modification Program (HAMP).

“Treasury needs to comply with the recommendations of the oversight witnesses … by setting performance goals and measurable benchmarks,” Grassley wrote. “I urge the Department to stop ignoring this simple recommendation and immediately work to make the taxpayer investment in HAMP worthwhile. … You can be sure that I intend to keep a watchful eye over the Department until it is done.”

Created in 2009, HAMP works with creditors and insurers to reduce eligible homeowner’s monthly mortgage payments to prevent foreclosures. 

Grassley said in the letter that $50 billion was set aside for the program in 2009, though less than $250 million has been spent. HAMP has helped 165,000 homeowners avoid foreclosure — a small figure when compared to the 3 to 4 million homeowners Treasury said the program would help when it was created.

Grassley called the HAMP program “a failure by any reasonable definition” and requested a response from Treasury by July 30, 2010. 

His letter follows a Senate Finance Committee hearing last week during which Neil Barofksy, special inspector for TARP, questioned the success and transparency of the program.

“This failure to adopt this recommendation is a failure to recognize the basic tenets of good government programs: clear goals, clear expectations and clear descriptions of performance against those benchmarks,” Barofsky said.

Barofsky said Treasury’s “failure” to establish benchmarks forces taxpayers to shoulder additional debt without knowing how many people the program is helping.