Well, it looks like this U.S. Treasury Department has done just that.
U.S. Sen. Chris Dodd and U.S. Rep. Barney Frank have just about had it with the U.S. Treasury Department and its implementation of the Troubled Asset Relief Program (TARP).
Dodd, D-Connecticut and Chairman of the Senate Banking Committee, and Frank, D-Massachusetts and Chairman of the House Financial Services Committee, said this administration's Treasury department may not get the second half of the $700 billion TARP financial rescue fund, as they are upset at how the program is being run, Bloomberg News reported.
"I would be a very hard person to convince that this crowd deserves...the next $350 billion," Sen. Dodd told Bloomberg News.
Further, Rep. Frank said Treasury has ignored "clear Congressional intent," and that at the very least he wants to see that some of the new money was going to used for home mortgage foreclosure relief, Bloomberg News reported.
Economist Peter Dawson said the key lawmakers have a legitimate gripe with the Treasury. "We have seen precious few dollars directed toward home mortgage foreclosure relief for preventable foreclosures," Dawson said. "The biggest success of the TARP is that the financial system has not collapsed. After that, the record is mixed at this juncture of the crisis."
Why aren't banks lending and initiating more mortgage refinancings themselves? "There hasn't been a Treasury mandate for them to lend and refinance. Absent that, they're doing what typical large, diverse banks would do during rough economic times, which is sit on the money," Dawson said. "They're hoarding the cash, in most cases, which is counterproductive, and it has meant that foreclosures are still occurring at an unacceptable level."
Further, Dawson said he doesn't think Congress will allocate the remaining $350 billion to this Treasury Department, and will wait until the Obama Administration takes control of the executive branch of government. At that time Dawson said it's likely Congress will issue new stipulations for the remaining TARP money "to get many more mortgages at risk refinanced and stop the home mortgage foreclosure conveyor belt."
Fiscal Policy / Economic Analysis: Treasury's stabilization of the financial system is commendable; it's inability to substantially decrease home foreclosures is not. Treasury's unwillingness to rapidly address the toxic asset problem at its source - - home mortgage foreclosures - - has been a huge mistake. It almost looks like Paulson didn't want to refinance the mortgages because he knew it would benefit Democratic voters more than it would Republican voters.
Whatever the reason, Treasury has failed in this vital task. The view from here argues that Congress, after January 20, 2009, should direct the funds to Obama Administration-led agencies that will refinance mortgages.
Reader Comments (Page 1 of 1)
12-05-2008 @ 2:04PM
Iridium said...
Nobody gets it. If you bought your house for $450k in 2006 that was worth $150k in 2002 and now is worth $200k, you should not be allowed to refinance if you can't afford it. Sorry but you lose your house. You helped to feed the insanity.
If you couldn't afford a $200k house and are crying now becuase it costs too much. Well you lose your house. Sorry you should have never bought it in the first place.
Any government program will only cause more problems than it fixes. Any attempt to prop up home prices will only prevent the price from falling to a realistic level where the majority of Americans can afford a house. The way it looks right now that means a price average of $140k.
Allowing people to refinance a purchase they can't afford by lowering principal or suspending interest is unfair to those who are still making payments and unfair to new homebuyers. Stopping pending forclosures only rewards the irresponsible and again is unfair to the responsible. With a moratorium anyone paying thier mortage is a complete idiot. Everyone should stop paying their mortage.
Then we have the huge problem with the Realtors Association. The entire purpose for the group to exist is to raise home values for no other reason than to increase profits. Housing prices remained nearly plat until the national realty association was created. From creation they have conspired to raise the price of homes far past the rate of inflation to increase commissions. They are onle of the principal players in the mortage meltdown.
That is why the Realty Association wants mortage rates to fall to 4.5%. Rather than sell homes at lower prices with a lower interest rate, they want to raise prices of homes in order to sell a person a $275k home for the same payment as a $200k home at 5.5%. They will work with appraisers and pay them off once again to overvalue homes to get a bigger commission.
What they will use as a excuse is that they will be able to sell a perosn a bigger better home because of the lower interest rate. What they won't tell you is that the house should be selling for $150k instead of $200k. That you should be paying $300 less per month for the mortage you just signed.
12-10-2008 @ 1:22PM
Jason said...
Congress has chosen members of an oversight committee specifically for the Troubled Asset Relief Program. The oversight committee members which lacks the ability to have proper oversight Which is defined as an oversight committee they should be looking for an omission or error due to carelessness, unintentional failure to notice or consider; lack of proper attention and supervision; watchful care. Supervision is a process that allows it to oversee a process during execution or performance; superintend needs to be replaced without regard to political affiliation.
http://nomedals.blogspot.com