Many of the lenders that helped fuel the housing crisis by issuing risky subprime loans are now lining up to receive more than $21 billion in taxpayer money intended to help bail out borrowers. At least twenty-one out of the top twenty-five participants in the Making Home Affordable program specialized in servicing or originating subprime loans, the report says.
The funds come from the government’s $75 billion Home Affordable Modification Program, or HAMP, which gives lenders taxpayer subsidies to lower mortgages that might otherwise end in foreclosure.
President Obama announced the details of the administration’s homeowner assistance plan at a speech in Phoenix in February. “But I want to be very clear about what this plan will not do. It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans. It will not help speculators—it will not help speculators who took risky bets on a rising market and bought homes, not to live in, but to sell. It will not help dishonest lenders who acted irresponsibly, distorting the facts—distorting the facts and dismissing the fine print at the expense of buyers who didn’t know better. And it will not reward folks who bought homes they knew from the beginning they would never be able to afford.”
Well, six months later, the Washington, DC-based investigative non-profit, the Center for Public Integrity, has a new analysis showing how the government is paying subprime players billions to fix the housing mess they helped create. This report is a follow-up to an earlier one that identified the top twenty-five subprime lenders and their financial backers, many of which were financial firms that received TARP funds through other federal programs.
Countrywide received $5.2 billion reached top. Second is JPMorgan Chase at $2.7 billion and third is Wells Fargo at $2.4 billion.
What a change.
– from democracynow.org