Another Bad Idea

It’s been enlightening to see what the “too big to fail” banks have been doingwith the money they received from the Troubled Asset Relief Program, isn’t it? Although the TARP was supposed to increase lending, quite a few of the financial institutions involved have decided to hold on to the money instead. The Obama Administration’s dubious claim that the TARP saved 8.5 million jobs is nothing short of ridiculous; it turns out that three of the layoff leaders in 2009 were CEOs of financial institutions that received TARP funds. These layoffs, by the way, increased the CEOs’ pay. Bonus, baby!

Then, there was the claim that the TARP would give homeowners with unaffordable mortgages some relief, via the attached HAMP program. The HAMP program was a mild form of mortgage modification that Obama preferred to Hillary’s proposal, called HOME, which would have taken a much more aggressive approach to the mortgage crisis precipitated by fraudulent and deceptive lending practices. For those who do not think there would have been a big difference between the Clinton and Obama Administrations, I give you her plan’s bullet points:

• 90-day foreclosure moratorium
• Freeze the interest rates on subprime ARMs for at least five years
• Allow the FHA to guarantee up to $400 billion in refinanced mortgages
• Put underwater mortgages on the government’s balance sheet on a temporary basis
• Introduce legislation to protect mortgage servicers from investor lawsuits
• Create a $30 billion stimulus package to allow cities and states to purchase foreclosed properties
• Set aside $10 billion to expand the mortgage revenue bond program
• Create a “high-level emergency working group” to brainstorm more ideas to help ease the foreclosure crisis

All this would have been proposed instead of the TARP, and I would be willing to bet that with a 60-vote majority in the Senate and all the Dems in the House, a large portion, if not all of it, would have passed. I believe this Commie Socialist Proposal from our Marxist Lady of the Pantsuit is yet another reason that the sellout Obamacrats wanted their fauxgressive, corporatist Trojan Horse in the White House.

The HAMP, of course, has not been quite as fabulous as the Administration claims.

The HAMP program has been viewed as a disaster by just about everyone outside of the Treasury Department. Every TARP watchdog — from the Government Accountability Office to the TARP Special Inspector General to the Congressional Oversight Panel to various congressional committees — has criticizedthis effort. The program has been marred by mistakes from servicers, such as losing homeowners’ paperwork and miscommunicating information to applicants. Additionally, Treasury officials are frequently criticized for using misleading figures about the program.

For example, Treasury boasts that “over 1.3 million homeowners had their monthly payments reduced” through HAMP. But most of those people only had the payments reduced through HAMP for a few months. Despite the billions of dollars made available for HAMP, fewer than half a million people received permanent mortgage modifications through the program. The month of August had the fewest number of permanent modifications to date. Meanwhile, more than 680,000 people have been removed from the program and failed to get permanent HAMP mods.

These all-too-predictable results prove MadamaB’s Theory of Government Benefits: Whoever gets the money from the government, benefits. Since the bulk of the TARP funding went to financial institutions, they are the ones benefiting, while the people are still suffering because we haven’t received anything more than a few crumbs. And so it goes.

Now, there is a new financial crisis – a big scandal brewing in the nation’s largest financial institutions. It’s been called the “robo-signing” scandal. The five-second summary is that the big banks do not fact-check foreclosure documents that come across their desks – they simply sign off on them. Never mind that these documents are often completely and obviously false.

Even if every robo-signed document were true — and they’re not all true — the robo-signers and the banks employing them have systematically created and submitted to courts hundreds of thousands of sworn documents that aren’t accurate.

The entire California Delegation in the House has called for a federal investigation of the robo-signing scandal, citing a 20-page letter filled with examples of foreclosure horror stories submitted by their constituents. Many banks have voluntarily frozen foreclosure proceedings while the robo-signing mess is investigated. The Attorney General and several top Congresscritters have gotten into the act, as well as some states’ attorneys. ****UPDATE: And Obama [thanks to La-T-Da for explaining this in a more accurate manner] has vetoed a  bill that would have allowed electronically-notarized foreclosure documents to be put forth in the courts as verified, even if there was no human notary behind the signatures. This bill would have essentially swept these fraudulent documents under the rug and legalized them before the courts.***

I can’t wait to see what happens after the November elections, can you?

This is an open thread.

And, in honor of Verdi’s birthday yesterday: