On April 20th, Neil Barofsky, the Special Inspector General for the Troubled Asset Relief Program went before the Senate Committee on Finance and called upon the Treasury Department to utilize appraisals for the Home Affordable Modification Program (HAMP) in an effort to prevent fraud. He stated that:
“To protect against fraud, Treasury should abandon its differing valuation standards across HAMP and adopt the Federal Housing Authority’s appraisal standard for all HAMP principal reduction and short sale programs.”
The entire testimony of Mr. Barofsky can be viewed by clicking on the following link:
Statement of Neil Barofsky Before the Senate Committee on Finance
On the same date, the Office of the Special Inspector General for TARP issued its quarterly report which included the following recommendations:
Treasury’s new initiatives…include:
“Requiring that servicers ‘consider’ principal write-downs at their option as part of the loan modification process when indicated by program guidelines, with increased incentives for successful principal write-downs.
A new program, to be backed by $14 billion in TARP funds and managed by both Treasury and the FHA that will enable seriously underwater borrowers to refinance their mortgages so that the total amount that they owe on their homes will not exceed 115% of the homes value”
http://www.appraisernews.com/current-issue/