Neil Barofsky, former special inspector general for the Treasury Department’s Troubled Asset Relief Program, talks to “Viewpoint” host Eliot Spitzer about how the government’s bailout helped the banks but failed to help homeowners while any fundamental mortgage reform remains elusive.
“The core issues of abuse, of homeowner abuse through the mortgage modification process, appears to be going on unabated. That’s what I’m hearing from mortgage counselors, from people on the ground — that almost nothing has changed,” Barofsky says.
And a TARP initiative intended to help homeowners, called the Home Affordable Modification Program, has also failed, according to Barofsky. “They actually built incentives into that program so that banks could rack up fees month after month after month, even when the borrower was making all of his payments,” he says. “So in some ways, not only did we not deal with the problems, we enabled a lot of the misconduct and incentivized it.”