Treasury Makes Shocking Admission: Program for Struggling Homeowners Just a Ploy to Enrich Big Banks

[Stoic]

"...The Treasury Department's plan to help struggling homeowners has been failing miserably for months. The program is poorly designed, has been poorly implemented and only a tiny percentage of borrowers eligible for help have actually received any meaningful assistance. The initiative lowers monthly payments for borrowers, but fails to reduce their overall debt burden, often increasing that burden, funneling money to banks that borrowers could have saved by simply renting a different home. But according to recent startling admissions from top Treasury officials, the mortgage plan was actually not really about helping borrowers at all. Instead, it was simply one element of a broader effort to pump money into big banks and shield them from losses on bad loans. That's right: Treasury openly admitted that its only serious program purporting to help ordinary citizens was actually a cynical move to help Wall Street megabanks.

Treasury Secretary Timothy Geithner has long made it clear his financial repair plan was based on allowing large banks to "earn" their way back to health. By creating conditions where banks could make easy profits, Getithner and top officials at the Federal Reserve hoped to limit the amount of money taxpayers would have to directly inject into the banks....

...Here's how Geithner's Home Affordability Modification Program (HAMP) works, or rather, doesn't work. Troubled borrowers can apply to their banks for relief on monthly mortgage payments. Banks who agree to participate in HAMP also agree to do a bunch of things to reduce the monthly payments for borrowers, from lowering interest rates to extending the term of the loan. This is good for the bank, because they get to keep accepting payments from borrowers without taking a big loss on the loan.

But the deal is not so good for homeowners. Banks don't actually have to reduce how much borrowers actually owe them—only how much they have to pay out every month. For borrowers who owe tens of thousands of dollars more than their home is worth, the deal just means that they'll be pissing away their money to the bank more slowly than they were before. If a homeowner spends $3,000 a month on her mortgage, HAMP might help her get that payment down to $2,500. But if she still owes $200,000 on a house that is worth $150,000, the plan hasn't actually helped her. Even if the borrower gets through HAMP's three-month trial period, the plan has done nothing but convince her to funnel another $7,500 to a bank that doesn't deserve it..."


Alternet: Treasury Makes Shocking Admission: Program for Struggling Homeowners Just a Ploy to Enrich Big Banks

[closeupready]

1. This is not shocking at all. It's consistent with the administration's track record.

They put the finance industry front and center, and the middle class somewhere down the list, oh, about at number 8 or 9. If we're lucky. That's how it has been, how it is and how it will be. Get used to it.

[geek tragedy]

2. "the plan hasn't actually helped her."

Oh, bull fuck it hasn't. It allowed her to keep her fucking house instead of getting foreclosed upon and evicted.

A house is first and foremost a place to live. It's not a stock portfolio.

[harun]

3. We've been saying this all along.

[CoffeeCat]

4. I struggle....I really do.

I want to understand Obama's role in all of this.

I don't want to be a naive Pollyanna. I don't want to bash Obama.

I just want to understand. Is Obama part of this--knowingly lying to us
while playing an active role in enriching the corporations with policies
that he knows will not help us--or even harm us?

Has Obama been in on it all along and have we been completely duped?

Or, is the cabal that has its talons in our democracy calling the shots
and forcing Obama to play along--or else.

During the height of the 2008 economic bust, Obama stood before all of us
and reassured the nation that help was on the way. Homeowners wouldn't
lose their homes and they would have help.

Was he totally lying his ass off, knowing that the policy was a windfall for
the banks and no help to homeowners? Or what?

I would really like to understand Obama's role in all of this.

[Blecht]

5. As the great philosopher Katie Holmes

As the great philosopher Katie Holmes (as Rachel Dawes) once said:

"It's not who you are underneath. It's what you do that defines you."

[Angry Dragon]

6. It seems he is an idea man

I do not think he is detail orientated.
He comes up with the plan and lets others implement.
He is not an in-your-face type of person,
more behind the scenes.
He may be a great person, but he is not the type
of leader this country needs at this time.

This country is at a crossroads and it needs a leader that
can determine what is best for this country. If he tries for
bi-partisanship and does not get it then he needs to push
anyway. He does not do this.

[Octafish]

7. Gee. I can separate what's good for the economy and what's good for the banks PDFQ.

Just do the opposite of what Wall Street says and then make the crooks who stole it pay every penny back.

Know your BFEE: Phil Gramm, the Meyer Lansky of the War Party, Set-Up the Biggest Bank Heist Ever.