That barfosky guy again

[Denny Crane]

http://finance.yahoo.com/news/Govt-watchdogs-mortgage-apf-1527849934.html?x=0

Gov't watchdogs: mortgage program is not working
Bailout watchdogs say Obama mortgage program is failing to help homeowners facing foreclosure

WASHINGTON (AP) -- Government watchdogs told a Senate panel Wednesday that the Obama administration's effort to help homeowners avoid foreclosure isn't working and that the Treasury Department has failed to fix the program.

Special inspector general for the financial bailouts Neil Barfosky said the program has not "put an appreciable dent in foreclosure filings," during a Senate Finance Committee hearing on the $700 billion bank bailout. He also said the Treasury Department has ignored earlier demands that it set clearer goals for the program.

Elizabeth Warren, who chairs a separate Congressional Oversight Panel on the bailouts, said Treasury's failure to act more quickly could be hurting the recovery.

More foreclosures could force down the price of homes and further hurt the already-ailing housing industry.

The homeownership program aims to reduce mortgage payments for millions of homeowners who can't afford their monthly bills. Recent data suggest it has helped about 400,000 households avoid foreclosure. About 530,000 have fallen out of the program.

The bailout has provided up to $50 billion for the mortgage modification programs. So far, about $248 million in bailout money has been spent on the program.

Barfosky said Treasury is giving mortgage companies too much leeway to decide which homeowners will qualify for a program to reduce the principal balance of their mortgages.

The program relies on voluntary cooperation from mortgage companies, Warren said. She said many of the mortgage debt collectors make more money when they foreclose than they do when helping homeowners.

"We have a crisis, and the consequences of not having cooperation from (mortgage) servicers is . . . felt by this entire economy," Warren said. "We need a program with far more urgency and some real teeth in it."

Also appearing at the hearing is a leader of the Government Accountability Office.

Their three offices are designated to provide transparency and oversight for the bailout program that Congress passed in October 2008.

Most of the financial bailout programs have ended as the financial system regained its footing. Treasury lent out a total of $385 billion from the $700 billion fund. As of June 30, about $198 billion had been repaid, according to the independent Government Accountability Office.

Treasury also has collected $25 billion in fees and interest payments from companies that received money.

President Barack Obama was preparing Wednesday to sign into law the most sweeping rewrite of financial regulations since the 1930s. The law includes changes aimed at reassuring Republicans, who worry the bailout fund could become permanent.

The size of the fund is reduced to $475 billion from $700 billion. Money that has been repaid must be used to repay the national debt, rather than expanding other programs. And the overhaul blocks Treasury from using the money to create new programs.

 

[Denny Crane]

Here's a perfect example of govt. stepping in and doing good things.

Right?

 

[Denny Crane]

More from Barfosky


http://www.reuters.com/article/idUSN2010140720100721

US financial system support up $700 bln in past year-watchdog

* Total US govt financial system support seen at $3.7 trln
* US support swells by $700 bln in past year-watchdog
* Mortgage, housing commitments account for most of rise
* TARP watchdog criticizes Obama housing rescue efforts

By David Lawder

WASHINGTON, July 21 (Reuters) - Increased housing commitments swelled U.S. taxpayers' total support for the financial system by $700 billion in the past year to around $3.7 trillion, a government watchdog said on Wednesday.

The Special Inspector General for the Troubled Asset Relief Program said the increase was due largely to the government's pledges to supply capital to Fannie Mae (FNMA.OB: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FMCC.OB: Quote, Profile, Research, Stock Buzz) and to guarantee more mortgages to the support the housing market.

Increased guarantees for loans backed by the Federal Housing Administration, the Government National Mortgage Association and the Veterans administration increased the government's commitments by $512.4 billion alone in the year to June 30, according to the report.

"Indeed, the current outstanding balance of overall Federal support for the nation's financial system...has actually increased more than 23% over the past year, from approximately $3.0 trillion to $3.7 trillion -- the equivalent of a fully deployed TARP program -- largely without congressional action, even as the banking crisis has, by most measures, abated from its most acute phases," the TARP inspector general, Neil Barfosky, wrote in the report.

The total includes Federal Reserve programs and a myriad of asset guarantees, including Federal Deposit Insurance Corp. protection for bank deposits.

The increased government commitments more than offset about a $300 billion decline in the U.S. Treasury's TARP commitments in the past year as programs have closed and banks have repaid taxpayer funds.

HOUSING PROGRAMS CRITICIZED

Barfosky also in the report ramped up his criticism of the Treasury's housing relief efforts, saying that its program to reduce monthly mortgage payments for struggling homeowners was showing "anemic" participation numbers and had failed to "put an appreciable dent in foreclosure filings."

He said Treasury had refused his repeated recommendations to announce more effective goals and benchmarks for its mortgage modification program, which could reach up to $50 billion in TARP funds.
"Treasury's refusal to provide meaningful goals for this important program is a fundamental failure of transparency and accountability that makes it far more difficult for the American people and their representatives in Congress to assess whether the program's benefits are worth its very substantial cost," Barfosky wrote.

Among other recommendations repeated in the report, Barfosky called for the Treasury to consider making its voluntary mortgage principal reduction program mandatory, saying this would make it less likely for "underwater" homeowners to abandon their properties.

The Treasury has declined to adopt the recommendation, citing the prospect that mandatory principal reduction would cause mortgage servicing firms to opt out of the program and fairness issues in reducing principal for both responsible homeowners hit by value declines and homeowners who overleveraged their properties in refinancings.

U.S. Treasury officials defended the Home Affordable Modification Program, saying that it was still on track to reach its goal to keep 3 million to 4 million homeowners in their homes by the end of 2012 and was adapting to changing conditions by offering forbearance to unemployed people and extra funding for the hardest-hit markets.

Herbert Allison, Treasury assistant secretary for financial stability, said the Treasury often agrees with Barofsky's recommendations, "but once in a while, we differ on what type of policy will best carry out our mandate."

The report provoked swift criticism of Obama administration housing policies from U.S. Rep. Darrell Issa, a California Republican who has taken every opportunity to blast the Treasury's handling of financial bailout programs.

"The fact that the Obama administration is treating TARP like its own personal slush-fund is beyond egregious and a complete betrayal of what the American people were told would be then when their tax-dollars were used to bailout Wall Street," Issa said in a statement, adding that the housing efforts were "dumping good money after bad".

(Reporting by David Lawder; Editing by Kazunori Takada)

 

[Denny Crane]

$3.7T here, $3.7T there, and pretty soon we're talking about real money.

But seriously, how many homes does $3.7T buy? How many mortgages does it pay down so people can afford the payments and not get foreclosed on?

That money is the equivalent of paying $100,000 to 37,000,000 people.

Instead, each and every one of 310M people in the USA's share of the federal debt is... $100,000.

 

[huevonkiller]

Damn, nice job barfo!

 

[Minstrel]

You misspelled "Barofsky" a lot when re-typing those articles, Denny.

 

[Denny Crane]

You misspelled "Barofsky" a lot when re-typing those articles, Denny.

I spelled Barfo correctly.

Anyhow, here's a perfect example of a miserable failure of government, right? So let's do it some more!

 

[barfo]

$3.7T here, $3.7T there, and pretty soon we're talking about real money.

But seriously, how many homes does $3.7T buy? How many mortgages does it pay down so people can afford the payments and not get foreclosed on?

That money is the equivalent of paying $100,000 to 37,000,000 people.

Instead, each and every one of 310M people in the USA's share of the federal debt is... $100,000.

I think the $3.7T didn't go to housing, so your math is a bit misleading. Yes, we could have bailed out more homeowners if we hadn't bailed out GM, AIG, Citibank, etc.
But then, there might have been more homeowners to bail out, had we not done those other things.

barfo-in-the-sky with diamonds

 

[huevonkiller]

I think the $3.7T didn't go to housing, so your math is a bit misleading. Yes, we could have bailed out more homeowners if we hadn't bailed out GM, AIG, Citibank, etc.
But then, there might have been more homeowners to bail out, had we not done those other things.

barfo-in-the-sky with diamonds

Hmm interesting choice.

Make sure to give S2 a shout-out in your next article. :]

 

[Denny Crane]

I think the $3.7T didn't go to housing, so your math is a bit misleading. Yes, we could have bailed out more homeowners if we hadn't bailed out GM, AIG, Citibank, etc.
But then, there might have been more homeowners to bail out, had we not done those other things.

barfo-in-the-sky with diamonds

If we bailed out homeowners, where would the money have gone? To Citibank, AIG, GMAC, and so on.

You might reread the 2nd article again.

 

[barfo]

If we bailed out homeowners, where would the money have gone? To Citibank, AIG, GMAC, and so on.

And to supermarkets! My god! Wait, what? Are you saying that bailing out GM is the same thing as bailing out bad mortgages?

You might reread the 2nd article again.

Wouldn't that require rereading it a first time, first? Which would in turn require reading it to start with?

barfo

 

[Denny Crane]

And to supermarkets! My god! Wait, what? Are you saying that bailing out GM is the same thing as bailing out bad mortgages?



Wouldn't that require rereading it a first time, first? Which would in turn require reading it to start with?

barfo

Yep, it would require reading it a first time.

$3.7B went directly to financial institutions. I wasn't suggesting that they give 37M people $100K each, but they could have bought down 37M mortgages by $100K each, or 18.5M by $200K each. Instead, we have banks foreclosing on people and dumping the homes on the market at really low prices, screwing over the people who've made their payments all along.