The PJ Tatler

Democrats to Geithner: Your Housing Rescue Program Stinks

Led by Rep. Maxine Waters (D-Calif.), 52 Democrats wrote to Treasury Secretary Tim Geithner on Friday to complain that government recovery programs such as the Hardest Hit Fund and the Home Affordable Refinance Program haven’t been using their allotted funding or working well.

The members blamed Treasury for “critical errors in its design, implementation, and oversight of the program.”

They noted, for example, California, which has spent 11 percent of its HHF funds and “only” assisted 4,357 homeowners. They also fault bank participation, saying that 70 percent of banks are “either not actively soliciting HARP 2.0 applications or have participated very little in the program.” The letter also charged that banks were adding requirements on top of the government program’s.

“We fail to see how additional credit requirements, limited consumer choice, and higher than market fees are a benefit to the nation’s homeowners or to our overall housing market,” the members wrote. “…We call upon you to take immediate action to prohibit these activities in the HARP 2.0 program so that it works for underwater homeowners and not against them.”

“While we believe that our government’s interventions are necessary for the sake of the economy, we do not believe in interventions that do not work well or that do not work as intended,” they added.

“We need to make sure government aid is reaching eligible homeowners quickly and appropriately,” said Rep. Bobby Scott (D-Va.), one of the signatories. “I hope the Treasury Department will take immediate action to improve the implementation and oversight of these critical assistance programs so that they actually help homeowners recover from the lingering effects of the deepest recession since the Great Depression.”