Neil Barofsky, the Special Inspector General appointed to oversee the implementation of the Troubled Asset Relief Program (TARP), has today released a quarterly report blasting the Obama administration and the Treasury Department for using the program to implement an “anemic” mortgage modification plan “that does no more than subsidize activity that would have occurred in its absence” and which is “not an efficient or effective use of taxpayer dollars.”
I have only seen excerpts of the report passed along by House GOP sources, but there is plenty of bite here.
The Obama Administration’s mortgage modification program, HAMP, “continues to struggle to achieve its original stated objective. . . and . . . has not put an appreciable dent in foreclosure filings.” Meanwhile “Treasury has rejected calls to announce publicly any goals or performance benchmarks for HAMP or its related initiatives concerning how many homeowners it actually expects to help stay in their homes, despite repeated recommendations that it do so” from government overseers.
The program’s own standards are, by contrast, “essentially meaningless” and reflect 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.”
“The American people are essentially being asked to shoulder an additional $50 billion of national debt without being told, more than 16 months after the program’s announcement, how many people Treasury hopes to actually help stay in their homes as a result of these expenditures, how many people are intended to be helped through other subprograms, and how the program is performing against those expectations and goals. Without such clearly defined standards, positive comments regarding the progress or success of HAMP are simply not credible, and the growing public suspicion that the program is an outright failure will continue to spread.”
Worse still, the report concludes, the HAMP program is unlikely to keep defaulted homeowners in their houses for good, and “re-defaults will indeed be a problem.”
More broadly, the report accuses the administration of jumping “into the deep end of the moral hazard pool through TARP,” leveraging the program’s authority to its farthest limits by deploying a whopping $3.7 trillion in overall support of the financial system – “largely without Congressional action – even as the banking crisis has, by most measures, abated from its most acute phases.”
The full report is here. Meanwhile, Kevin and Stephen — who have been saying ‘I told you so’ on TARP and the HAMP program in particular for so long that they need throat lozenges — have at it.