Treasury Dept. Throws Homeowners to the Wolves, Makes Bankers Rich

Just in case there’s still anyone out there who thinks that the government’s “home preservation” program HAMP (the Home Affordable Modification Program) was actually intended to help Americans devastated by the bank-induced economic crash and subsequent foreclosure feeding frenzy, here’s the real scoop from the man tasked with overseeing the bailout program TARP (Troubled Asset Relief Program).

From a Huffington Post article about the recent book released by Neil Barofsky, former special inspector general for TARP:

In response to homeowner complaints about mortgage servicers, Treasury “demonstrated no interest in taking even the most modest steps to punish them,” Barofsky writes. “That was unconscionable, given the pain being inflicted on so many home owners.”

In a meeting with [Treasury Secretary Timothy] Geithner — this one involving fewer f-bombs than others — Barofsky says he finally realized the root of the Treasury Department’s apparent lack of interest in helping homeowners: They apparently had another goal in mind.

At the meeting, Elizabeth Warren, then chair of a congressional oversight panel established in 2008 to oversee the bailouts, questioned Geithner about HAMP’s ability to help homeowners — not the last time she would grill him.

“In defense of the program, Geithner finally blurted out, ‘We estimate that they can handle ten million foreclosures, over time,’ referring to the banks. ‘This program will help foam the runway for them.'”

To Barofsky it seemed that Geithner saw HAMP mainly as a way to stretch out the foreclosure process, giving banks time to recover from the crisis without having to be hit with a wave of foreclosures all at once.

“Helping the banks, not home owners, did in fact seem to be Treasury’s biggest concern,” Barofsky writes. “HAMP was not separate from the bank bailouts; it was an essential part of them.”

So, according to the man in the know, HAMP was supposed to create a soft landing (“foam the runway”) for banks that have gotten rich from making millions of risky and fraudulent mortgage loans.

What I’d like to know is, why didn’t the U.S. government pay any attention to creating a soft landing for the millions of Americans whose lives, livelihoods, retirement savings and households were devastated through no fault of their own? Why hasn’t  the Dept. of Justice prosecuted a single bank exec. in the wake of mortgage loan fraud, robo-signing, securitization irregularities?

Oh, yeah. Most of us can’t afford to buy ourselves a senator, representative or a president like the big banks have done and are doing.

By the way, it seems Goldman Sachs and cronies have chosen to enthrone Romney this time, so no doubt see absolutely no need for the little people to waste time and effort voting. No worries, then, if you lost your house to an iffy foreclosure process and had to move, but forgot to update your voter registration. Wells Fargo, B of A, Chase, Citi and friends will take care of choosing a government that will keep providing them a soft place to land.

3 thoughts on “Treasury Dept. Throws Homeowners to the Wolves, Makes Bankers Rich

  1. I am a Mother of a daughter that lost her job in the Mortgage business at a
    National City Bank. That was 3 Years ago -She was advised to stop her house Payments to qualify for a loan MOD . She had never been late on any of her HOUSE payments til she was advised to stop the payments. Being in the mortgage dept she has sent. ALL OF THE REQUIRED DOCUMENTS /
    ON TIME to the correct address. She has called almost daily/ they have said they did not receive the documents/THIS NITEMARE HAS GONE ON FOR. 3 YEARS. I AM A EIGHTY/WONDERFULL year old GREAT GRAMMA !!
    SHE HAS A JOB W/ ANOTHER BANK. She had faith that she would get
    The loan mod. There is more to this story / Please Help us
    My email is PLEASE REPLY ASAP

  2. Hi Doris,
    Amazing, isn’t it, that even bank employees with contacts and inside information can’t find a way through the mortgage mod quagmire? That sure says something about how truly messed up the system is and how little the mortgage servicers care about anything other than making another quick buck. I look forward to the day when these tactics finally backfire and the to-big-to-serve banks fall into the abyss of their own creation.
    Thank you for reminding me of the “collateral damage” in all this – the extended families and others who care about the millions of people who are caught up in the foreclosure feeding frenzy. I know my mom has lost sleep over my situation, as well.
    I’m so sorry both you and your daughter have had to go through this nightmare. Nobody should be treated with the disrespect and disregard the banks show for these people who were their customers, but who were consigned (without their consent or even knowledge) to a sort of limbo after their mortgage loan originators sold them off to investors.
    After three years, I assume she will have reached out to her state’s attorney general, to state and federal lawmakers and to the appropriate regulatory agencies. (Not that any of them are doing anything really helpful.)
    I surely wish I could do something for you or me or any of the other people being jerked around by banks. I hope you and your daughter will find some useful information on this blog or on my website If you/she haven’t already done so, post the the forum and maybe you’ll get some help there.
    I wish you the best of luck and peaceful sleep.

    • Thank you and bless you for your reply.
      We will pursue the websites that you suggested.
      I am upset over the lack of media attention AND HOW ABOUT (25 interviews w/ football player and his
      FAUX PAS GIRLFRIEND. ??? Not even close to reality.
      We need more FYI. For your information
      On the media thanks again
      And also for letting me VENT

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