Mortgage Aid Program Not Working; Foreclosures Piling Up, Watchdogs Tell Senate

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A government program meant to help at-risk homeowners negotiate better monthly payment deals is not working and could even endanger the economic recovery as foreclosures pile up, federal watchdogs told a Senate panel Wednesday.

Neil Barofsky, inspector general for the government's Troubled Asset Relief Program (TARP), said the mortgage aid program has not "put an appreciable dent in foreclosure filings," the Associated Press reported. Barofsky told the Senate Finance Committee the U.S. Treasury Department has ignored demands that clearer goals be set for the Making Home Affordable program.
TARP Inspector General Neil Barofsky (L), Oversight Chair Elizabeth Warren

TARP Inspector General Neil Barofsky (L), Oversight Chair Elizabeth Warren

The program depends on voluntary cooperation from mortgage companies in working out refinancing deals that can reduce the principal balance for sinking homeowners. More than 400,000 households have been helped, the AP said, but about 530,000 more have dropped out of the program.

Elizabeth Warren, who heads a separate Congressional Oversight Panel on the financial relief programs, said, "We have a crisis, and the consequences of not having cooperation from (mortgage) servicers...is felt by this entire economy. We need a program with far more urgency and real teeth in it." She said many mortgage debt collectors make more money when they foreclose than they would in assisting struggling homeowners.

Bailout funds have provided as much as $50 billion for mortgage modification programs,

Filed Under: Economy, Obama Administration

Tagged: dailyguidance, Elizabeth Warren, Foreclosures, homeowners, housing, Making Home Affordable, mortgages, tarp

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kafrench34

All those billions in bailouts for the banks and wallstreet criminals and the auto companies and nothing left for we little people. Its like putting a big bandaid on a limb thats been cut off!!!!If people keep losing their jobs-no amount of refinancing or bailout will last forever

September 08 2010 at 9:44 PM Report abuse Permalink rate up rate down Reply

beckjr2000

Is there anyone out there that actually believes the mortgage aid program was actually designed to help people with mortgages? All it did was increase the amount of paperwork!

July 21 2010 at 4:41 PM Report abuse Permalink +9 rate up rate down Reply

1 reply to beckjr2000's comment

Eric

What do you think it was designed to do?

July 21 2010 at 4:57 PM Report abuse Permalink -3 rate up rate down Reply

jetdevil68

FAILURE is an option. We should NEVER subsidize FAILURE. The bank bailouts, GM's bailout, Chrysler's SECOND bailout, this mortgage aid program, extending unemployment and increasing welfare. We are quickly becoming a nation who welcomes and embraces FAILURE. Is there no longer any sense of shame about FAILURE in America?

July 21 2010 at 4:24 PM Report abuse Permalink +11 rate up rate down Reply

walkingman50

You think this is bad wait till Obama financial reform kicks in !

July 21 2010 at 3:46 PM Report abuse Permalink +17 rate up rate down Reply

1 reply to walkingman50's comment

joe

My guess is there will be no finances left to reform.

July 21 2010 at 4:14 PM Report abuse Permalink +11 rate up rate down Reply

drbuckles

The people with the highest foreclosure rate, the people who have second homes and rentals. Yes people, thanks to a law signed by Bush, allows people with property to write off loses just like a business. You think the Republican party really feels for you and your loss? No it's your fault for the bank failures.

July 21 2010 at 3:28 PM Report abuse Permalink -23 rate up rate down Reply

greatbirdusa

You mean the Obama administration spent like drunken sailors and now we are deep in debt with nothing to show for it!
Let's turn Healthcare over to these clowns!

July 21 2010 at 3:19 PM Report abuse Permalink +22 rate up rate down Reply

1 reply to greatbirdusa's comment

Eric

Ahem, you do mean the Bush administration "spent like drunken sailors", right?

July 21 2010 at 3:26 PM Report abuse Permalink -24 rate up rate down Reply