Tarp IG Barofsky: Treasury Done Very Little to Fix HAMP Failure

[chill_wind]

Treasury Done ‘Very Little’ to Fix Gov’t Foreclosure Prevention Program, Says Watchdog
by Marian Wang
ProPublica, March 3, 2011

Making the argument that the Treasury Department has done “very little” to improve a foreclosure prevention program that has failed to meet its goals, the government’s TARP watchdog testified at a hearing on Wednesday that the case for keeping the program alive has worn thin and is “all but exhausted <1>” .

We’ve documented many of the major weaknesses in the government’s loan modification program—not least of which is its failure to hold banks accountable <2> for withholding permanent loan modifications from struggling homeowners that the program was intended to help.

(snip)

“Treasury, it seems, stands alone in defending the status quo,” testified Neil Barofsky, the special inspector general for the TARP program. Barofsky noted that last month, a Treasury official attended a Mortgage Bankers Association conference to discuss enhancements to the loan modification program and said there would be no “major new programs coming out.”

more:
http://www.propublica.org/blog/item/treasury-done-very-little-to-fix-governments-foreclosure-prevention-program

ProPublica has much more in depth with charts, graphs:

By the Numbers: A Revealing Look at the Mortgage Mod Meltdown
by Olga Pierce and Paul Kiel
ProPublica, March 8, 2011, 12:37 p.m.

For the past year, we've been digging into the administration's fumbling efforts <1>. We've crunched a lot of numbers along the way, and now we're sharing what we found – including loads of previously unreported data.

Using new Treasury Department figures, previously unreleased documents obtained through Freedom of Information Act requests, and new analyses of state and industry data, we have assembled the most detailed look yet at how the the mortgage industry <2> and the government's main effort, the Home Affordable Modification Program (HAMP), have failed homeowners. It provides crucial context to the ongoing government investigation into mortgage servicing practices, which might lead to reforms <3> of how banks and servicers handle homeowner requests for modifications.ogram? We want to hear from you.

Here's what we learned:

# Only a fraction of struggling homeowners are getting help.… <4>

# Mortgage servicers are only reaching a small fraction of struggling homeowners.… <5>

# The largest servicers, especially Bank of America, have left most struggling homeowners in limbo without either modifying or foreclosing. <6>

# HAMP itself hasn't made much difference: It hasn't led to an increase in modifications.… <7>

# Just over one in five homeowners who applied for a HAMP mod have received a permanent modification… <8>

# And in one quarter of rejections, mortgage servicers - notorious for losing documents - have cited missing documents as the reason. <9>

# Here are your overall chances of getting a mod with each of the top servicers. <10>

# Treasury claims servicers are improving, but its own data show otherwise. <11>

# When servicers offer a mod, it's generally more affordable than mods used to be.… <12>

# But instead of mods, servicers have recently been offering more repayment plans, which actually increase struggling homeowners' payments. <13>

# In the end, most government funds set aside to help homeowners are still unused.

(see internal links)

http://www.propublica.org/article/by-the-numbers-a-revealing-look-at-the-mortgage-mod-meltdown#comments

[xchrom]

1. One begins to think they don't want to - and later

The government will reclaim the unused money.

[chill_wind]

3. It is an effing joke. Relying on the servicers to police themselves

and taking most all of the penalties off the table when they don't.

By Geithner The Fixer, their best pal, of course!

http://www.propublica.org/article/loan-mod-program-crippled-by-lax-oversight-and-deference-to-banks

[chill_wind]

2. More from ProPublica and Barofsky:

from January-

(snip)

Over the past year, ProPublica has been exploring why the government’s program has helped so few homeowners. Over the coming weeks, we will be detailing how the administration quietly retreated from a plan to get tough on banks, why the mortgage servicing industry lacks incentives to invest in helping homeowners, how the industry succeeded in thwarting oversight, and what reforms could lead to more help for homeowners.

The stories are based on newly disclosed data, lobbying disclosures, dozens of interviews with insiders, members of Congress, and others. Today’s story looks at the timidity of Treasury’s oversight, a conclusion echoed in a government report Wednesday.

“At some point, Treasury needs to ask itself what value there is in a program under which not only participation, but also compliance with the rules, is voluntary,” says the new report <6>, from the special inspector general for the TARP. “Treasury needs to recognize the failings of and be willing to risk offending servicers. And if getting tough means risking servicer flight, so be it; the results could hardly be much worse.”

Govt’s Loan Mod Program Crippled by Lax Oversight and Deference to Banks

by Paul Kiel and Olga Pierce
ProPublica, Jan. 27, 2011, 10:42 a.m

http://www.propublica.org/article/loan-mod-program-crippled-by-lax-oversight-and-deference-to-banks