WASHINGTON – Jan. 27, 2011 – A mortgage modification program aimed at saving homeowners from foreclosure has failed because regulators are “afraid to rein in or impose penalties on the mortgage servicers” whose record “has been nothing short of abysmal,” the program’s watchdog told Congress Wednesday.

As a result, some House Republicans moved to scrap the 2-year-old program.

Neil Barofsky, the special inspector general for the government’s bank bailouts, bluntly labeled the mortgage program a “failure” in testimony before the House oversight committee.

“And I think that if Treasury doesn’t respond to some of these things in a quick manner,” he said, the call to dismantle the Home Affordable Modification Program (HAMP) “is just going to become a louder and louder chorus, and understandably so.”  Read more...