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No Room at the Inn - No Mortgage Relief in TARP

Michael Collins

The Money Party D ecember 2, 2010http://www.themoneyparty.org/main/?p=328

What do you get when you cross TimGeithner and Peter Peterson?

Barack Obama; who would rather help thebig banks and balance the budget than offer a helping hand for struggling homeowners.(Image)

The president demonstrated new heights of indifference toward the people in hishandling of the mortgage relief programmade a part of the Trouble Asset Relief Program (TARP). Citizens paid the fullshare for TARP and were to get a modestproportion. That's not the case. TheNovember 2010 Congressional Budget Office Report on TARP was just issued. Itshowed that the funds for home mortgage assistance programs would be reduced from$50 billion to $12 billion, as reported in the Huffington Post .

Reading the details of the report, we find that the take back from homeowner relief through TARP funds is even more outrageous. The actual funds spent so far for

homeowner relief is only $710 million.

The remaining $11 billion "additional funds" billion of will not likely materialize. In hisOctober 2007 report the Special Inspector General for TARP , Neal Barofsky, noted that,"HAMP produced a net increase of fewer than 26,000 permanent modifications a monthsignaling that the anemic pace of permanent modifications may even get worse" The $11billion "additional funds" will be treated like the previous $50 billion commitment that

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turned into $11 billion. It is an accounting version of Zeno's Paradox .

In the mean time, AIG got $48 billion and Investment Partnerships another $15 billion,none of which has been paid back. So the score is AIG/Bankers $94 billion -Homeowners $0.71 billion. Quite a deal!

Here are the CBO Report figures on the actual beneficiaries of the mortgage relief programs under TARP. There were 207,000 permanent loan modifications with 28,000

canceled for a net of 179,000 homes saved for citizens. The much publicized trial loanmodification program under HAMP had 1.7 million loans enrolled. Forty one percent of these were canceled and another 173,000, 10%, are in "limbo" providing no benefit tohomeowners.

Commenting on the D epartment of Treasury handling of homeowner assistance, Special Inspector General NealBarofsky, said,

"Treasury has steadfastly rejected these recommendationsand now finds itself defending a program that is failing to

meet TARP's goal of 'preserving home ownership.' As aresult, a program that began with much promise now must be counted among those thatrisk penetrating public anger and mistrust." Neal Barofsky, Special Inspector GeneralTarp Oct 26

App arently the President missed this

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Individual bankruptcies are up significantly. Bankruptcy D ata Project The seriousness of the increase is indicated y the graph below which compares 24 month periods before and

after the hypothesized October 2008 financial meltdown.

Bankruptcies are approaching 140,000 a month and. Banks foreclosed on two millionhomes since 2009. But AIG, with several thousand employees has received every centallocated while just a fraction of the TARP money intended for mortgage programs hasmaterialized.

In addition to total bankruptcy increases, Chapter 13 bankruptcies are barely a third of thetotal of Chapter 7 and Chapter 13 combined. Chapter 13 offers citizens the chance to

retain their homes and other assets. Chapter 7 is simply a surrender of all assets,including the family home.

The worse things get the worse they make them

We've got a dead economy, real unemployment approaching 20%, and no bubbles on thehorizon. What's the response?

Give the companies and the people who caused the problem hundreds of billions and thecitizens next to nothing. Act like we're in a recovery and the recession is over. And focuson balancing that damn budget by cutting the only truly budget neutral program, the one

that pays for itself, Social Security. Start some more wars and create a war on terror sideshow by irradiating or groping all commercial airline passengers.

Here's the frightening thing. If you think things are bad now, wait until the new crop of Republicans takes over the House. The President of the Tea Party Nation , JudsonPhillips, just announced that he favors restricting the vote to property owners only. Of course, there may be problems with that since the people he thinks are property holdersare really debt slaves to the big banks, the real property owners.

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Another chapter in the great decline brought to you by The Money Party .

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