Around $30 billion allocated in the Troubled Asset Relief Program (TARP) to help struggling homeowners will likely be paid on the national debt instead, reports ProPublica, a self-proclaimed “independent, non-profit newsroom” dedicated to “exploring the abuses of power and betrayals of the public trust by government, business and other institutions”. The report indicates that while about $2 billion of that money has been used for homeowner aid programs, the remainder has been “mandated” by Congress to be used to pay down the national debt. The excess monies remain in TARP coffers largely because of the profoundly poor performance of federal homeowner help programs like the Home Affordable Foreclosure Alternative (HAFA) program, Home Affordable Modification Program (HAMP) and Home Affordable Refinancing Program (HARP), all of which have significantly underperformed projected goals. And while the federal government protests that it actually is on track to spend $7.2 billion helping homeowners, those monies are scheduled to be paid out as incentives over a number of years rather than on new homeowners entering the programs. Most of these programs are currently slated to close in 2012 or sooner.
According to TARP regulations, any money that remains unspent must be redirected toward paying down the national debt.
Do you think that this redirection is appropriate since it seems pretty obvious that the government is incapable of “fixing” the housing market through direct interference?
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