Like Atrios, I've been screaming about HAMP, the anti-HOLC, since last year. Atrios says it best:

Keeping people in their homes should always have been the goal, and smart people should have set up a reasonable incentive system of carrots and sticks, with that lovely $50 billion budget, to do this. Foreclosures are incredibly costly, both for the people getting kicked out of their homes and the surrounding communities. They're also costly for the investors.

I'm in looking forward mode, so I guess I should be thinking about what should happen now. Seems to me that since most of the HAMP money is still sitting around, the Obama Administration can still do a HOLC. I'd at least find out if I could if I was Obama. What Hillary Clinton said in September 2008 was true then and it is true today:

If we do not take action to address the crisis facing borrowers, we'll never solve the crisis facing lenders. These problems go hand in hand. And if we are going to take on the mortgage debt of storied Wall Street giants, we ought to extend the same help to struggling, middle-class families.

Speaking for me only

Jeralyn pointed out that President Obama praised Larry Summers for "doing a heckuva job." More such praise is due to his team working on the foreclosure crisis:

Revelations about paperwork shortcuts and so-called robo-signed affidavits, as well as the likelihood of protracted legal battles by homeowners and inquiries by state and federal officials, will hinder foreclosure proceedings and discourage prospective buyers, a Treasury Department official said. “Together, these two factors may exert downward pressure on overall housing prices both in the short and long run,” said the official, Phyllis R. Caldwell, chief of the homeownership preservation office at the Treasury.

[More...]

Atrios (and other bloggers) met with President Obama today. Hopefully he asked him about HAMP:

Every [HAMP] trial modification payment reads as a default to the credit reporting companies. The Treasury Department could have set it up so that didn’t happen; they chose not to intervene in that reality. All of the money between the trial modification and the original payment that borrowers don’t pay during their trial period gets tacked on as part of the unpaid principal balance at the end. The servicers also tack on late fees. Treasury could have banned that. They chose not to intervene. The servicers can proceed with foreclosure operations during the trial period, arguing that the borrower is in default. They can’t actually foreclose (also in some cases they have). But they can go through the legal process. Treasury could have put a stop to that. They didn’t. Borrowers keep getting told they have to miss a payment to be eligible for HAMP. Treasury actually didn’t put that into the design. But they haven’t sanctioned a single servicer for this or any other violation of the program guidelines. They could have done something. They didn’t.

(Emphasis supplied.) Speaking for me only

Via ZeroHedge, TARP Inspector General Neil Barofsky issued a scathing 388 page report (PDF). Geithner's Treasury Department catches the brunt:

While SIGTARP offers no opinion on the appropriateness or accuracy of the valuation contained in the Retrospective, we believe that the Retrospective fails to meet basic transparency standards by failing to disclose: (1) that the new lower estimate followed a change in the methodology that Treasury previously used to calculate expected losses on its AIG investment; and (2) that Treasury would be required by its auditors to use the older, and presumably less favorable, methodology in the official audited financials statements. [. . .] This conduct has left the Treasury vulnerable to charges it has manipulated its methodology for calculating losses to present two different numbers depending on its audience [. . .] Here again, Treasury's unfortunate insensitivity to the values of transparency has led it to engage in conduct that risks further damaging public trust in the Government.

(Emphasis supplied.) There's more and worse. A stunning rebuke.

Speaking for me only

Why was the 2009 stimulus too small? Two primary reasons -- one, Lawrence Summers misread the economic catastrophe at hand:

The memo argued that the stimulus should not be used to fill the entire output gap; rather, it was “an insurance package against catastrophic failure.” At the meeting, according to one participant, “there was no serious discussion to going above a trillion dollars.” [. . .] Summers [. . .] believed that filling the output gap through deficit spending was important, but that a package that was too large could potentially shift fears from the current crisis to the long-term budget deficit, which would have an unwelcome effect on the bond market.

Two, Rahm Emanuel misunderstood the Congressional process:

Krugman:

The real story of this election, then, is that of an economic policy that failed to deliver. Why? Because it was greatly inadequate to the task.

Could the stimulus have been made more effective? David Corn:

The "original sin of the Obama administration," says former labor secretary Robert Reich, "was to make the stimulus too small while giving out too much of it as tax breaks to businesses." [. . .] White House aides—and my colleague Kevin Drum—will say that Obama obtained the biggest stimulus he could, given GOP opposition. But the president need not have accommodated his foes so readily. "He could've demanded more, and settled for less," says a senior Senate Democratic strategist. That would have at least established a useful story line: For more recovery, we need to do more. Instead, Obama was left hailing a stimulus that didn't do enough.

And Obama got what he asked for:

Paul Krugman calls this an Epitaph for the Obama Administration:

In today’s report on the foreclosure mess, a revealing sentence:

As the foreclosure abuses have come to light, the Obama administration has resisted calls for a more forceful response, worried that added pressure might spook the banks and hobble the broader economy.

The country has demanded bold, persistent experimentation and the Obama Administration's economic team has provided persistent resistance to boldness.

Speaking for me only

The White House blog:

Today, the White House announced that President Obama will not sign H.R. 3808, the Interstate Recognition of Notarizations Act of 2010, and will return the bill to the House of Representatives. The Interstate Recognition of Notarizations Act of 2010 was designed to remove impediments to interstate commerce. While we share this goal, we believe it is necessary to have further deliberations about the intended and unintended impact of this bill on consumer protections, including those for mortgages, before this bill can be finalized.

Notarizations are important for a large range of documents, including financial documents. As the President has made clear, consumer financial protections are incredibly important, and he has made this one of his top priorities, including signing into law the strongest consumer protections in history in the Wall Street Reform and Consumer Protection Act. That is why we need to think through the intended and unintended consequences of this bill on consumer protections, especially in light of the recent developments with mortgage processors.

The authors of this bill no doubt had the best intentions in mind when trying to remove impediments to interstate commerce. We will work with them and other leaders in Congress to explore the best ways to achieve this goal going forward.

Reuters:

The White House said on Thursday the administration is reviewing legislation that could make it more difficult for homeowners to challenge unjustified foreclosure actions. White House officials held meetings on the bill to weigh whether the president should sign or veto the legislation, White House spokesman Robert Gibbs said.

[. . . ]Gibbs said after officials considered potential effects of the bill, "I think in general obviously there is concern, ultimately, about the situation." He said the White House may disclose later today a decision on whether the president will sign the bill.

Tomorrow is Rahm Emanuel's last day at the White House. He's returning to Chicago to run for Mayor. Too bad for Chicago.

Who will replace him?

Finally it seems someone in the White House has done some work on the message they want to convey. In Madison, Wisconsin, President Obama stopped whining and dropped the "you Dem voters need to stop whining" jag, adopting a better approach:

President Obama delivered an impassioned argument to young voters Tuesday night, declaring that the changes he promised in 2008 are underway and that "now is not the time to give up." "The biggest mistake we could make is to let disappointment or frustration lead to apathy . . . that is how the other side wins," Obama said. "If the other side does win, they will spend the next two years fighting for the very same policies that led to this recession in the first place."

[. . . Russ] Feingold did show, dismissing the idea of an enthusiasm gap between the parties. Obama picked up the theme, announcing to the crowd at the outset that he was "fired up" - another 2008 echo. Then, with his sleeves rolled up and his shirt unbuttoned at the top, Obama rolled out a rollicking 45-minute campaign speech. He defended his record, joked with the crowd and challenged the conventional wisdom that Democrats are going to lose in November. "The prediction among the pundits is, there's going to be a bloodletting for Democrats. That's what they're saying in Washington," Obama said, drawing boos. "And the basis of their prediction is that all of you who worked so hard in 2008 aren't going to be as energized, aren't going to be as engaged." He continued: "Wisconsin, we can't let that happen. We cannot sit this one out. We can't let this country fall backward because the rest of us didn't care enough to fight."

"We can't let that happen." Finally, Obama is not whining about people not cheering him. Instead he is saying everyone needs to roll up their sleeves to fight back the extremist GOP onslaught and to keep trying to move forward. This is the right message. One last thing - keep Biden off the stage please.

Speaking for me only

Bob Woodward's book on the division between Obama and his advisors on the war in Afghanistan is making big news. Republicans hope they can play it up and gain votes in November. Sample over-the-top headline: The Guardian, which proclaims " Obama Presidency hobbled by discord."

The Obama presidency is hobbled by discord and mutual contempt among its senior policy-makers and top generals according to a new book which is likely to damage the administration in November's congressional elections and undermine its efforts in Afghanistan.

The book, Obama's Wars, by the veteran investigative journalist Bob Woodward, is out on Monday, but extracts published overnight by the Washington Post and the New York Times make it clear that it will hurt the administration in the runup to mid-term elections, in which Democrats are already struggling and in which they are expected to lose control of the House of Representatives.

I hope that was written by a Guardian opinion writer rather than a news journalist, because the conclusions it draws are anything but "clear" and "likely." The WaPo excerpt of the book is here. The White House says it's pleased with the book.