Most of Treasury's Successful Mortgage Modifications Weren't Actually Successful
As Matt Welch already noted, the Special Inspector General's oversight report on the Treasury Department's TARP self-reporting is tough stuff. Not only did Treasury change its accounting practices without disclosure in order to make losses on AIG look smaller, it wildly overstated the so-called positive effects of HAMP, the mortgage modification program. As CNN reports:
Treasury has said several times that its mortgage modification program has "helped" more than 1.3 million homeowners by reducing their monthly mortgage payments, calling each of these a "success," the report said.
However, Barofsky's team took issue with the level of success, saying more than 700,000 of the modifications ultimately failed and another 173,000 remained in limbo.
"They say for example that they've helped more than 1.3 million people through mortgage modifications, but more than half of those have failed," Barofsky said. "Then, they go and say, ' Well, each one of those had a significant benefit for the homeowner.' And that's just not true."
As Tim Cavanaugh pointed out back in August: HAMP didn't benefit homeowners very much. But it did help keep big banks afloat.
