Treasury Used Bogus Info In Report To Homeowners

A must read blog post written by Richard Zombeck on Shame the Banks:

According to a recent article in HuffPo by Shahien Nasiripour, “Treasury claims that Fannie Mae, which administers its Home Affordable Modification Program, screwed up. As a consequence, the public can no longer tell whether homeowners with HAMP modifications … are being placed in sustainable mortgages.”

According to the article, Treasury, relying on reports from Fannie Mae, miscalculated the default rates of HAMP participants by about 600%.

Treasury spokesman Mark Paustenbach said, “In an effort to review and better explain the methodology, we learned from our program administrator, Fannie Mae, that not all canceled loans were included in the underlying information provided to Treasury. The error caused inconsistent reporting of permanent modifications during the snapshots reported. These omissions have impacted our previous analysis… with respect to the performance of HAMP permanent modifications.”

Ironically, the week before, in a conference call with reporters, Herbert M. Allison Jr., Treasury’s assistant secretary for financial stability, went so far as to praise the default rate as “very low.”

Of course, Allison thought the default rate was six percent, when in fact it’s been more 60 percent according to Barclay’s analyst and as high as 75 percent according to analysts at Fitch Ratings.

I asked her why the administration continues to see these programs as a success when the only point of reference they use to gauge the performance is the bank’s own reporting of their progress. She then directed me to the progress reports on – the same reports Treasury is now reporting as flawed.

Those reports are crap; I’ve seen them,” I said in response, “Why aren’t you talking to the homeowners and people whose loans have been supposedly modified. Why isn’t there any oversight or verification?”

I didn’t get a direct response. Instead she looked to her colleagues in the back of the room and said, “We’ll take that under advisement,” and moved to the next question in the room.

My question is: are there still people in this country willing to fight or have the banks and corporations really beaten us down enough to claim victory?