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At the end of October, the Obama Administration announced changes to the Home Affordability Refinance Program that conceivably will make as many as 2 million more homeowners eligible for refinancing over the next two years. This will lower the default risk for the government sponsored entities and their ultimate backers, the American taxpayers, and should provide some level of economic stimulus.
November 22 -
The special inspector general for Tarp will wrap up his two-year-plus tour on Wednesday, and he has nothing good to say about Treasury's implementation of the $700 billion bailout.
March 27
Neil Barofsky, the former special inspector general for the Troubled Asset Relief Program, hammered the Obama Administration and Treasury Department Tuesday night at
Barofsky, a former assistant U.S. attorney who is now a senior fellow at New York University's School of Law, said the administration's Home Affordable Modification Program was "a failure" because the Obama White House feared being labeled as helping "undeserving homeowners."
Asked if there was any hope for homeowners at risk of foreclosure, Barofsky said: "Um, no."
The panel
"The crisis is an example of how people lose their faith in government, which has costs that are hard to quantify," Barofsky said during the two-hour event at the Tenement Museum in New York's Lower East Side. "Everything that has happened since [Tarp] has been something of a mess."
When the administration introduced the Hamp program in 2009, Rick Santelli, an editor at CNBC Business News,
Barosky said the White House, out of concern that aiding homeowners would cause a political backlash, quickly backed away from its goal of helping 3 million to 4 million homeowners avoid foreclosure.
There was a fear of "moral hazard," the idea that homeowners who were not financially strapped would default to get a principal reduction, Barofsky said.
He argued that the $28 billion left in the Tarp program should be used to modify loans, but he faulted the Treasury for never spending the money, calling it a "lost opportunity."