Bailout:Some More Details About TARP(Barofsky)

John Hope III,chairman of Whitney National Bank in New Orleans, received $$300 million in TARP funds was quoted as saying "make more loans?We're not going to change our business model or our credit policies to accommodate the needs of the public sector". That statement summarizes the banks response to the mortgage relief problem effecting millions of American citizens during the  economic crises that began in 2008.It was a windfall ,no strings attached, that the banks used to pay down debt,acquire other businesses or invest for the future.They were self centered as usual to keep their stockholders happy with high levels of return and the hell with the public who put up the money in good faith.Larry Summers,the new director of President Obama's National Economic Council,had indicated that Treasury would impose new conditions on TARP recipients.Before the release of the second $350 billion in TARP money,Summers had said that it would require healthy banks to increase lending above baseline levels and preclude the purchase of other firms. Kashkari,assistant secretary of the Treasury and TARP Czar, dismissed Summer's point saying that the new conditions are purely political and Barofsky stated that he was correct and never saw the light of day. HAMP(Home Affordable Modification Plan) was announced by Geithner(New Treasury Secretary) and followed by President Obama that promised to help 3 to 4 million homeowners modify the terms of their mortgages to avoid foreclosure. The program would pay incentives to home owners,investors and servicers at a total cost of $75 billion($50 billion from TARP and $25 Billion from Fannie and Freddie).Geithner was more interested,according to Barofsky, in helping the banks than the home owners because he stated that the program would help foam the runway for them.This meant that Geithner looked at HAMP as an aid to the banks,keeping the full flush of foreclosures from hitting the financial system all at the same time.It gave the banks more time to absorb losses while the other parts of the bailouts juiced banks profits that could then fill the capital holes created by housing losses.So the homeowners got screwed again because the administration(banks)wanted to stretch this program out until profits returned. HAMP was an essential part of the bank bailouts.It didn't matter if modification failed after a year or two of trial payments or if struggling borrowers placed into doomed trial modifications ended up worse off,as long as the banks were able to stretch out their pain .As of 2012,only 500,000 modification plans have been operational out of 3 to 4 million homeowners.