When Thomas Jefferson wrote, “I believe that banking institutions are more dangerous to our liberties than standing armies,” he was surely unaware of how closely tied the government he helped form would become with these bloated greed factories and their fat-cat ilk. Take Timothy Geithner as a prime example. He is behind a program known as HAMP (Home Affordable Modification Program), which has proven to be a disaster in every way. It has failed in helping homeowners keep their property, and now its more sinister purpose has been exposed.
When one defaults on their mortgage, the bank takes a hit in the shorts, there’s no doubt there. But a bank can handle it. They have the money. What they can’t handle is when thousands upon thousands of loans default at the same time. That can overwhelm the bank, and cause it to fail. Banks have a vested interest in slowly down the rate of foreclosures.
With that in mind, Mr. Geithner devised HAMP. The program actually does nothing to help homeowners long-term. It merely lowers their monthly payment to the bank without decreasing the overall amount owed. Homeowners may be paying less, but they are ratcheting up more debt.
With hundreds of thousands of homeowners dropping out of the program and defaulting on their debts, it became clear that the program was an abject failure. When Geithner was confronted by Elizabeth Warren, that staunch defender of the population against the excesses of the banking industry, Geithner did nothing but continue to praise TARP (the bank bailout) while ignoring concerns about HAMP. Now we know why.
HAMP was never designed to help homeowners, but rather to help banks, as treasury department officials have as much as admitted. By cutting down monthly payments, homeowners were able to keep their houses for longer than they would have normally, regardless of their eventual default. The goal wasn’t to prevent homeowners from defaulting eventually, it was to prevent them from defaulting now. It was a devious way of cushioning the blow for banks, which as previously mentioned, can survive defaults, just not an onslaught of them.
Timothy Geithner is a wretch who sold out the public for the good of his banking masters, and he did it by claiming to help struggling families across the nation. How complicit was President Obama in this program, and why isn’t he doing anything to punish Geithner or to provide tangible help to those same families who just got taken for a ride by their government? We would have expected the treasury secretary to be a no-good sellout to the banking industry, but we expected better from Obama. Shame on you, Mr. President. Here’s hoping you rectify this travesty as soon as possible.
(From Alternet)
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