Neil Barofsky, Special Inspector General for the Troubled Asset Relief Program, heaped more criticism on Treasury for its failure to adopt more realistic goals for the number of people who can benefit from its program to modify mortgages to slash monthly payments.
"Treasury's continued indications that this is a successful program without identifying these goals and benchmarks is simply not credible," Barofsky told the U.S. Senate Finance Committee. "And I fear that the growing public suspicion that this program is an outright failure will continue unless and until Treasury adopts this recommendation and comes clean with what its goals and expectations are."
The Treasury has stated its goal for its $75 billion Home Affordable Modification Program was to cut monthly payments for 3 million to 4 million "responsible" homeowners by the end of 2012 — excluding speculators or those who bought vacation homes.
The Treasury released figures this week showing that it had assisted 1.3 million homeowners so far, but over 40 percent of these — around 530,000 — have dropped out of the program. In fact, more borrowers dropped out than those who achieved permanent status in June.
Barofsky and Elizabeth Warren, who chairs the bailout Congressional Oversight Panel, told lawmakers that the program was doing little to provide real housing relief.
Warren, considered a leading candidate to lead the new Consumer Financial Protection Bureau signed into law by President Barack Obama on Wednesday, said the program had not kept up with the deterioration in the housing market.