On May 21, 2009, Michael Barr was confirmed by the United States Senate to serve as the Treasury Department’s Assistant Secretary for Financial Institutions, which means he’s the guy responsible for developing policy on legislative and regulatory issues that affect the banks et al. You might not remember him because he paid his taxes.
Barr is predominantly an academic. He taught at University of Michigan’s Law School, and was a Senior Fellow at the Center for American Progress and at Brookings. He was also Treasury Secretary Robert Rubin’s Special Assistant, Deputy Assistant Secretary of the Treasury, Special Advisor to President Clinton, Special Advisor at the State Department, and Law Clerk to Justice Souter. He got his law degree at Yale and was a Rhode Scholar.
So, why am I bringing him up as this month’s REAR? Well, because Michael S. Barr puts the ingenuous into disingenuous, and I just had to say something about it before he learns so much from Geithner and Bernanke that I can’t tell what he’s saying anymore.
This past September 9th, Barr gave a speech about the Home Affordable Modification program, or HAMP. This was more than a month after Secretary Geithner had summoned the servicers to Washington D.C. and allegedly read them the riot act, which was followed by the publication of the so-called shame inducing report cards. In his speech Barr said:
There are clear signs that the incentives offered under the Home Affordable Modification Program are having a substantial effect. These participating servicers have extended offers on over 570,000 trial modifications. Over 360,000 trial modifications are already underway.
Now, come on… that’s funny stuff, right? Not only was I laughing along, but I couldn’t help but feel a bit sorry for this erudite and accomplished academic who somehow ended up going from being a Senior Fellow at Brookings to the PR guy for Tim Geithner. And then he said:
HAMP's pay-for-success structure aligns the interests of servicers, investors and borrowers in ways that encourage loan modifications that will be both affordable for borrowers over the long term and cost-effective for taxpayers.
LMAO... HAMP is a structure that aligns the interests of borrowers in ways that encourages loan modifications? Who writes Mike’s speeches over there at Treasury? That chick from Legally Blond? And then:
Participating servicers are also required to evaluate every eligible loan using a standard net present value (NPV) test. If the test is positive, the servicer must modify the loan.
BWHAHAHAHAHA… The servicer “must” do something? They must? Oh, I needed this, I really did. This is therapeutic. Go on, Mikey, please go on…
At this early date, HAMP has already been more successful than any previous similar program in modifying mortgages for at risk borrowers to sustainably affordable levels, and helping to avoid preventable foreclosures.
Sop it. Stop it. It’s hurting my cheeks, I’m cramping up over here. “More successful than any previous similar program in modifying mortgages?” Hope-4-Homeowners? You don’t mean to say that HAMP is more successful than that? BWHAHAHAHA…
We are asking that all servicers move rapidly to expand servicing capacity and improve the execution quality of loan modifications.
And they did “ask” that all of the servicers move more rapidly to get loan modifications. Who asked? Why the U.S. Department of the Treasury, that’s who. You would think that Treasury would have some clout with the mortgage servicer crowd, especially when you stop to consider that the list of servicers include such names as Wells Fargo, Bank of America and Chase.
Yet, here we are… three more months since Barr did his stand up routine, and the progress being made by servicers has been stellar… if measured by the increasing number of foreclosures. If we’re counting loan modifications, however, well… in that case… they would have to be considered either monumentally incompetent, or they just don’t give a rat’s behind what the government says or wants.
As of about a month ago, fewer than 2,000 of the 500,000 trial loan modifications in the works had become permanent under Making Home Affordable, according to a congressional oversight panel. Next month, Treasury says it will release new numbers, but I’d say it’s an absolute lock that they’ll report a insanely low number of permanent loan modifications.
So, how many chances are we going to give these ineffectual fools before we storm the castle? G.W. Bush and Hank Paulson totally blew it. Now Obama and Geithner have somehow managed to under-perform their abysmal track record. It’s not funny… it’s heartbreaking… people have taken their own lives and died from the stress of this free fall in the housing market.
So, I open the New York Times today to read a story about how the Obama administration is under pressure to do something effective to stem the tsunami of foreclosures, and who’s being quoted once again, my pal Michael Barr:
“The banks are not doing a good enough job. Some of the firms ought to be embarrassed, and they will be.”
Does Mikey have a learning disability? Why would anyone think that the banks are capable of feeling shame? I mean, absent the multi-billion intervention by the federal government, Goldman wouldn’t even be here, and yet they’re paying out the highest bonuses in history… $16.7 billion. Shame? You, Mikey, are the one who should be ashamed for even suggesting at this stage of the game that shame has even a modicum of potential to do anything.
The Times went on to report that:
Mr. Barr said the government would try to use shame as a corrective, publicly naming those institutions that move too slowly to permanently lower mortgage payments. The Treasury Department also will wait until reductions are permanent before paying cash incentives that it promised to mortgage companies that lower loan payments.
“They’re not getting a penny from the federal government until they move forward,” Mr. Barr said.
All right… that’s enough, Mr. Barr. That might just be the most ridiculous sentence of this entire decade. Now I have to go take a hot bath, pour a glass of wine, and try my hardest to stop thinking about how joyous it would be to kick your ass. The banks aren’t going to get a penny until when, you moron? You want to re-think that line and get back to me?
According to Barr, the mortgage program has sufficient tools to deliver relief, and he characterized the slow pace as “reflecting a lack of follow-through, and not structural defects requiring a revamping”. Shut up Mike… just shut up. You haven’t been right about this topic even once. You’ve failed repeatedly when this country needed you to succeed.
Some Democrats say the time has come to reconsider a measure opposed by the Obama administration: giving bankruptcy judges the right to amend mortgages as a means of pressuring lenders to extend reductions.
Ya’ think? And since when is the Obama Administration opposed to bankruptcy reform that would allow for judicial loan modifications? President Obama said he was for it in his speech introducing his Making Home Affordable program last February. Has something changed? Oh yeah, I remember now. Since he became president, he decided to be the best friend the banks have ever had in the White House, and let the people, as they say, eat cake.
Look, after watching two years of this unbridled ineptitude and absolute folly, I’ve learned one thing of which I am now absolutely certain: Neither our politicians nor our bankers possess the capacity to experience shame. So, since their answer to the foreclosure crisis is once again SHAME… like it was last July when they published the report cards, then it’s game over as far as I’m concerned.
Step down, Mr. Barr. Your services are no longer required. And you can leave today, as far as I’m concerned. No need to wait until your replacement is found, because having no one in your position, as compared with having your useless carcass in the seat… well… let’s just say there’s no chance you’ll be missed, and leave it at that.