SIGTARP is investigating unlawful conduct by financial institutions that the Treasury continues to pay TARP dollars
Unlawful conduct by any of the 130 banks and other financial institutions in the $27.8 billion Making Home Affordable (MHA) program under the Troubled Asset Relief Program is the top threat in TARP, according to a quarterly report to Congress by the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
Special Inspector General Christy Goldsmith Romero said the office is currently investigating unlawful conduct by banks and other financial institutions that the Treasury continues to pay TARP dollars under the MHA program.
Romero noted that the Treasury has so far spent $18.4 billion under the MHA program and will spend up to $9.4 billion through 2023. SIGTARP has shifted its resources to focus on this threat given an increase in enforcement actions against financial institutions in the MHA program.
Aside from recent enforcement actions that raise the threat level for the program, Romero said another factor is the scaling back by the Treasury of its MHA examinations to identify failures by banks to follow MHA rules. Treasury no longer issues ratings, calling MHA a “closed” program, despite being committed or obligated to pay $9.4 billion.
According to Romero, the stakes are high in MHA. “The financial institutions in MHA have experienced a financial recovery in recent years – a recovery that could be jeopardized by unlawful conduct that triggers foreclosures. With nearly one million homeowners currently in the program with mortgages that may form the basis of derivative securities, unlawful conduct risks destabilizing institutions, investors, homeowners, and communities,” she said.
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Special Inspector General Christy Goldsmith Romero said the office is currently investigating unlawful conduct by banks and other financial institutions that the Treasury continues to pay TARP dollars under the MHA program.
Romero noted that the Treasury has so far spent $18.4 billion under the MHA program and will spend up to $9.4 billion through 2023. SIGTARP has shifted its resources to focus on this threat given an increase in enforcement actions against financial institutions in the MHA program.
Aside from recent enforcement actions that raise the threat level for the program, Romero said another factor is the scaling back by the Treasury of its MHA examinations to identify failures by banks to follow MHA rules. Treasury no longer issues ratings, calling MHA a “closed” program, despite being committed or obligated to pay $9.4 billion.
According to Romero, the stakes are high in MHA. “The financial institutions in MHA have experienced a financial recovery in recent years – a recovery that could be jeopardized by unlawful conduct that triggers foreclosures. With nearly one million homeowners currently in the program with mortgages that may form the basis of derivative securities, unlawful conduct risks destabilizing institutions, investors, homeowners, and communities,” she said.
Related stories:
FTC charges 11 companies, 3 individuals over fraudulent loan modification scheme
States squandered $3 million in Hardest Hit Fund cash on parties, bonuses – SIGTARP
