Bair joined Neil Barofsky, the former inspector general of the Troubled Asset Relief Program, in portraying Geithner as being more concerned about the welfare of the biggest banks than that of homeowners. Geithner told him that the administration’s Home Affordable Modification Program was meant to “foam the runway” for lenders, or stretch out foreclosures so that the firms wouldn’t be overwhelmed, Barofsky wrote in his book.
“HAMP was a program designed to look good in a press release, not to fix the housing market,” Bair wrote. Geithner “didn’t seem to care about the political beating the president took on the hundreds of billions of dollars thrown at the big- bank bailouts and AIG (AIG) bonuses, but when it came to homeowners, it was a very different story.”
The government’s main program to prevent foreclosures was overly complicated and doomed to fail because it required too much paperwork and lacked oversight and enough financial incentives, Bair wrote. Geithner dismissed Bair’s housing relief plan and was determined to exclude her from helping administer assistance programs, she wrote.
Bair cringed at Obama’s “wildly inflated” goal of helping 3 million to 4 million borrowers through HAMP, she wrote. The program has resulted in 825,478 permanent modifications since 2009. Large banks were to blame for the results because they had half the response rate of smaller firms, according to a paper released last month by researchers from the Federal Reserve Bank of Chicago and the Office of the Comptroller of the Currency.