'[I]n 2009, $50 billion in TARP funds had been committed to help homeowners through the Home Affordable Modification Program (HAMP), a program that the president announced was intended to help up to 4 million struggling families stay in their homes through sustainable mortgage modifications. Hundreds of billions more were still available and could have been used by the White House and the Treasury Department to help support a massive reduction in mortgage debt. But Geithner avoided this path to a housing recovery, explaining that he believed it would be “dramatically more expensive for the American taxpayer, harder to justify, [and] create much greater risk of unfairness.” Treasury amplified that argument in 2010, after it reluctantly instituted a weak principal reduction program in response to overwhelming congressional pressure. ...
'[T]hree years later, with a tightening presidential election and a Democratic base disillusioned by the government’s abandonment of its promise to help homeowners (less than 8 percent of the funds originally allocated in TARP for foreclosure relief has actually been spent), Geithner and the administration would like to present themselves as having undergone a conversion.'
Read the entire entry here.
The announcement of HAMP is what really got Rick Santelli's goat on CNBC one day in early 2009 and set off a fire storm which coalesced in the outrage of the Tea Party movement. The conservative instincts of the Tea Party movement were and remain opposed to bailouts of homeowners, bankers, car manufacturers, insurers, multinationals like GE, and on and on. Barofsky is probably right that this is nothing more than a cynical political ploy to shore up support among Democrats. But if he's not buying it, who will?
