SIGTARP Report Confirms: Homeowner Bailout Program Won’t Fix Housing Crisis

Connie Hair at Human Events reports:

A new report released yesterday (.pdf) by Neil Barofsky, special inspector general for the Troubled Asset Relief Program (TARP) warns that Obama administration efforts to bailout homeowners through the Home Affordable Modification Program (HAMP) are ineffective and will not stem the sweeping tide of foreclosures.
The $75 billion HAMP program was created with a promise to bailout 3 to 4 million homeowners in foreclosure, paying lenders to modify troubled mortgages. Foreclosures reached 2.8 million in 2009 and are on track to exceed that total with over 932,000 foreclosures filed in the first three months of 2010, the report found.
The inspector general found the program “has made very little progress in stemming this onslaught” in a year with only 230,000 loans permanently modified. . . .
Rep. Jeb Hensarling (R-Texas), top Republican on the House Financial Services Subcommittee on Financial Institutions and Consumer Credit put a fine point on the bailouts rewarding bad behavior.
“We must remember that 93.6% of households rent, own free and clear, or are current on their mortgages,” Hensarling stated. “Programs like HAMP that force the responsible majority to subsidize the irresponsible minority should be rejected. . . .
“Not only is this expensive program ineffective, it is completely unfair,” Hensarling said. “HAMP forces responsible taxpayers, struggling to make their own mortgage payments, to pay their neighbor’s mortgage. . . .”

Meanwhile, Hensarling is offering a bill that would repeal the Community Reinvestment Act, the Jimmy Carter-era legislation that helped spawn the mortgage meltdown.

Not only is the failure of HAMP the latest evidence that Obamanomics still isn’t working, but this SIGTARP report is yet further confirmation of my hunch last summer — when the “IG-Gate” scandal heated up — that Barofsky was “the IG most likely to get a Cabinet secretary sent to federal prison.”

But we really don’t want to start talking about Tim Geithner and Goldman Sachs, do we?

(Cross-posted at The Other McCain.)

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