The Obama Administration’s foreclosure help program, the Troubled Asset Relief Program (TARP), is being questioned by government watchdog groups as well as some politicians.

The critics are highlighting what they say is a lack of accountability and transparency through failure to set proper goals and identify benchmarks. This means that the $50 billion invested in the foreclosure help program may or may not be working, but as things stand, there is no effective way to find out.

Foreclosure Help

“…no established goals for foreclosure help program…”

“Treasury still has not established proper goals or benchmarks for the program,” said Senator Chuck Grassley, a republican from Iowa.

He went on to add that, “…there is no effective way for us to know if the $50 billion invested in the program is accomplishing what it set out to do.”

Fifteen months into the controversial foreclosure help program and the successful loan modification cases are in the minority, compared to the number of participants who have failed.

“That’s not accountability, that’s not transparency; it’s more taxpayer money flying out the window,” said Grassley, one of the hardest critics of the program.

“…foreclosure help program criticised…”

It is the Home Affordable Modification Program (HAMP) part of TARP that is causing the criticism. From the overall $700 billion spent on TARP, $50 billion paid for HAMP. It was intended to offer some three or four million people real foreclosure help. To date, around 390,000 people have had permanent home loan modifications and have now resumed making their monthly payments on time.

According to the testimony of Elizabeth Warren, chair of the Congressional Oversight Panel on TARP, at a Senate Finance Committee hearing last Wednesday, for every family that has their home secured through the foreclosure help program, ten more families end up in foreclosure and lose their homes.

Defending HAMP at a press conference right after the hearing, Assistant Secretary of the Treasury for Financial Security Herb Allison said that the ever changing nature of the foreclosure crisis and the lack of anything previous to go by make it near impossible to set goals and benchmarks.

“By the nature of the crisis, we can’t control the outcomes,” he said. “For us to say we are going to have a finite number of people for these programs could constrain us from having the flexibility to deal with the dynamic problem.”

Neil Barofsky, special inspector general for TARP, called on the Treasury at the hearing for them to come forward with more information and figures on the numbers of homeowners it expects HAMP to help.

“…foreclosure help program an outright failure…”

“The continued public suspicion that his program is an outright failure will continue unless and until Treasury … comes clean with what its goals and expectations are,” he said.

Meanwhile, in excess of 40 percent of the 1.3 million original participants in the foreclosure help program who are at risk of losing their homes have dropped out.

Related Posts:

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2. Foreclosure Program: Homeowners Still Dropping Out
3. Foreclosure Prevention: Obama’s Secret Weapon Could be Warren
4. Foreclosure Program Struggles As Homeowners Drop Out
5. Foreclosure Help Overwhelmed, Michigan Aid Program Facing Problems