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Don't Extend HAMP - End It

Stocks in this article: BAC WFC JPM

Its latest performance report leads off saying it has given assistance action to 1.6 million homeowners and then only includes positive looking charts. The cancellation numbers are printed but not displayed as prominently.

To be fair, the Treasury Department may have been thwarted by the banks. Like Bank of America (BAC), which is accused of stalling the HAMP program applications or denying applications at will. In the case of the United States vs. Bank of America, No. 2193, Complaint for Violations of The False Claims Act, employees claim they were told to lie to potential HAMP recipients about the status of the application and reject applicants for no real reason. If this turns out to be true, then the Treasury Department could have a valid reason to extend the program. Bank of America employees stated that if they didn't meet their quotas for putting homes into foreclosure they were fired. They were instructed to stall on HAMP applications and then twice a month Bank of America went on a blitz and declined thousands of these same HAMP requests because the documents were 60 days old and considered "stale".

The Treasury department paid Bank of America millions in TARP incentive payments, but the bank had the highest number of cancelled HAMP modifications and the second highest amount of homeowners rejected. The BofA employees - UNDER OATH - say the bank only used the HAMP incentive money as a tool to squeeze the homeowners into foreclosure. So, here again, the Treasury is just throwing taxpayer money at programs that it isn't able to monitor. Even the Special Inspector General hadn't caught this ruse.

So, if the Treasury can't keep track of this money and can't trust the banks to properly administer the program, it should not extend it. Home prices are rising, foreclosure rates are declining. It's time to close the chapter on HAMP.

--Written by Debra Borchardt in New York.

>To contact the writer of this article, click here: Debra Borchardt.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.
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