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Eye on the Bailout

Behind the Financial Reform Push, Worries of Warring Regulators

The New York headquarters of the Lehman Brothers investment bank on Sept. 14, 2008, the day before it filed a Chapter 11 bankruptcy petition in U.S. Bankruptcy Court. A look at the run-up to Lehman's collapse shows that cooperation among the financial regulators was in short supply. (Michael Nagle/Getty Images)Backers of financial regulatory reform are gearing up for the final stretch in a yearlong effort to construct a new, streamlined architecture. But recent reports and testimony about the financial crisis suggest a crucial ingredient in any new structure is in short supply: cooperation among the watchdogs.

A proposal to eliminate one regulator seen by many as particularly weak -- the Office of Thrift Supervision -- could alleviate some friction. A soon-to-be-released federal examination of the Washington Mutual collapse found that OTS resisted efforts by a more skeptical regulator, the Federal Deposit Insurance Corporation, to take a closer look at WaMu, according to an account in The New York Times.

The Call Geithner Didn’t Make While His New York Fed Watched Over Citigroup

(Win McNamee/Getty Images file photo)The proposition that Treasury Secretary Timothy Geithner, in his prior job as president of the Federal Reserve Bank of New York, didn’t do enough to rein in banking giant Citigroup just gained new support.

On Wednesday, the Financial Crisis Inquiry Commission disclosed that a peer review study by other Federal Reserve banks in 2005 found that the New York Fed "had insufficient resources to conduct supervisory activities" of Citigroup.

Treasury, Ahem, Clarifies Goals for the Mortgage Mod Program

April 15: This post has been corrected.

 How many struggling homeowners will get a mortgage modification through the government’s $75 billion program? It would seem to be a simple question. But for the past year, the administration has been saying one thing, and observers have been hearing another.

What the administration has been saying is that the program “will help up to 3 to 4 million at-risk homeowners avoid foreclosure by reducing monthly mortgage payments.” Sounds like the Treasury Department is aiming to get 3 million to 4 million modifications, right?

Actually, Treasury’s real goal is between 1.5 million and 2 million permanent modifications, according to a new watchdog report.

New Data Shows Loan Mod Logjam Continues; Servicers Must Double-check Denials

Homeowners listen during a foreclosure prevention workshop held on Sept. 3, 2009 in Commerce City, Colo. (Photo by John Moore/Getty Images)
New data released Friday shows that the story for the government’s foreclosure prevention program remains the same: Mortgage servicers have delivered relatively few permanent modifications, and hundreds of thousands of borrowers in trial modifications have yet to receive a final answer after many months of waiting.

To illustrate the performance of the servicers in the program, we’ve created an interactive breakdown of the data. There, you can see how bad the logjam is at each one.

Last month, we reported that approximately 100,000 homeowners had been stuck in trials for longer than six months and some homeowners had been stuck in trial modifications for as long as 10 months. That hasn’t changed – in fact, the numbers continue to worsen.

According to a ProPublica analysis of the new data, approximately 150,000 homeowners have been in a trial for longer than six months. The trials are supposed to last only three months – time for the homeowners to turn in all their financial documentation and demonstrate an ability to make the lower monthly payments.

Your Bailout Update: $315 Billion in the Red

The Treasury Department received $1.5 billion in a sale last week of Bank of America's common stock warrants. It also invested another $15.3 billion into Fannie Mae.After shrinking for several months, taxpayer exposure to the bailout jumped in February, due to Fannie Mae’s receiving another $15.3 billion.

The toll stands at $315.3 billion. That number accounts for not only the bailout money still outstanding, but also the revenue that the government has collected from recipients. Included in that revenue is $1.5 billion the Treasury Department received last week for its auction of Bank of America’s common stock warrants. Altogether, the government made a profit of about $4.6 billion through its investment in Bank of America.

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About This Project

We're tracking where the bailout money is going. Our lead bailout reporter – and blogger – is ProPublica's Paul Kiel. Lead developer is Dan Nguyen.

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  • Our frequently updated database tracks every dollar. In the scorecard, we provide a summary generated from the latest numbers.
Photo by flickr user sparkieblues http://www.flickr.com/photos/sparkieblues/3971258497/

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