http://www.nytimes.com/2010/07/22/business/22tarp.html?_r=1&scp=1&sq=inspector%20reports%20that%20a%20program%20to%20help%20prevent%20foreclosures%20falls%20short&st=cseProgram to Help Prevent Foreclosures Falls Short
By SEWELL CHAN
Published: July 21, 2010
WASHINGTON — The Obama administration’s program to help homeowners avoid foreclosure has fallen far short of its goals, in part because the Treasury Department has failed to spell out what its objectives should be, according to an assessment offered to Congress on Wednesday.
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, which is financed by money from the $700 billion Wall Street bailout authorized in late 2008.
Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program, as the bailout is called, testified that “one of the greatest failures” by the Treasury Department had been the absence of clear goals for the program.
“It’s a simple recommendation that we made, that Treasury put forth how many people it truly expects to help stay in their houses through permanent modifications,” Mr. Barofsky told members of the Senate Finance Committee. “It’s a recommendation that all three of us on this panel have made to Treasury and that Treasury has ignored.”
http://www.credit.com/news/credit-debt/2010-07-26/tarp-program-scrutinized-for-failing-to-meet-projected-foreclosure-goals.htmlTARP program scrutinized for failing to meet projected foreclosure goals
07.26.10
By Credit.com Staff
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Faith in the effectiveness of the Obama administration's Troubled Asset Relief Program, and more specifically the Home Affordable Modification Program, is beginning to wane as lawmakers and consumers see very little improvement in the national foreclosure rates.
The $700 billion relief package devoted $50 billion toward HAMP in an effort to reduce the monthly mortgage loan payments of many distressed Americans - a move that was expected to curb the number of foreclosure filings. But according to The Hill blog, the number of failed mortgage modifications provided by HAMP far exceeds the number of successful ones.
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Warren cited the lack of sufficient funding as one reason for the program's lack of success, saying that only $247.5 million of the $49.7 billion allocated to the program has been spent.
"It's too small and too slow," Warren said in her testimony. "We need a program with far more urgency and some real teeth in it."
This article ends with the comment that RealtyTrac estimates that we could see 3 million MORE foreclosures by the end of the year!
What does it take to get Treasury to get off its ass, and start REALLY helping homeowners?
The first real thing they could do is freeze the mortgage and allow the troubled homeowner to stay in the home at current market rents which are often a lot lower than the troubled mortgages with their adjustable rate increases.
If I were in charge, I would renegotiate a mortgage based on current market value. I would put the negative equity in a silent second mortgage or lien on the home which would only become due and payable if and when the homeowner sells. Why wouldn't that work?