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Testimony that HAMP’s failure is lack of clear goals

When TARP Inspector General Neil Barofsky criticized the Home Affordable Modification Program (HAMP) as being ineffective, he blamed the Treasury Department for not setting clearer goals for that part of the Troubled Asset Relief Program (TARP).

Only 390,000 homeowners “have seen their mortgage terms permanently modified since the $50 billion program was announced in March 2009. That is a small fraction of the three to four million borrowers who were supposed to receive assistance under the program.”

HAMP program’s failure: absence of clear goals

Barofsky testified that “one of the program’s greatest failures” was the absence of clear goals for the program.

Elizabeth Warren, chairwoman of the Congressional Oversight Panel, and Richard Hillman from the Government Accountability Office both agreed. Hillman said the program “made limited progress in preserving homeownership.” Warren added: “Fifteen months into this program, for every one family that appears to have made it to a permanent modification that’s likely to [keep] that family in that home, 10 more have been moved out through foreclosure.”

Government support for the mortgage industry has grown to more than $3.7 trillion

That all of this posturing was just a deliberate distraction became clear, however, when Barofsky pointed out that the entire federal government’s support for the mortgage industry has grown to more than $3.7 trillion, which included government promises and guarantees not only to the Federal National Mortgage Association (Fannie Mae) and to the Federal Home Loan Mortgage Association (Freddie Mac), but also to the Federal Housing Administration (FHA), the Government National Mortgage Association (Ginny Mae), the Veterans Administration (VA), and the Federal Insurance Deposit Insurance Corporation (FDIC).

Barofsky said that the estimated $3.7 trillion cost to the taxpayers increased by $700 billion in just one year, “the equivalent of a fully deployed TARP program [all by itself].”

Furthermore, these increases more than offset the much-ballyhooed “paybacks” from some banks that have repaid some of their TARP loans. He added that “Federal support for the nation’s financial system … increased … largely without congressional action.”
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Source: http://www.thenewamerican.com/index.php/usnews/politics/4106-tarp-criticism-misses-the-point

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Tags: Elizabeth Warren, , Neil Barofsky, tarp, TARP Inspector General, TARP Inspector General Neil Barofsky

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One Response to Testimony that HAMP’s failure is lack of clear goals

  1. Testimony that HAMP's failure is lack of clear goals | Loan … | American Financing Articles on 26/08/2010 at 15:39

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