One of a few core causes of the collapse of the U.S. financial industry, and the resulting recession, was the bursting of the housing bubble—and as a result there have been several piecemeal programs geared at keeping struggling homeowners in their houses, and keeping their mortgage payments coming in. Elizabeth Warren, chair of the Congressional Oversight Panel tasked with keeping an eye on how TARP funds have been spent, found in her April report that the foreclosure crisis remains a major cause of instability in economic recovery and major cause for concern going forward. Warren’s report finds that the Home Affordable Modification Program, a part of TARP, has modified the mortgages of only 1,711 homeowners and has failed to address foreclosures caused by such factors as unemployment and negative equity. If foreclosures are still problematic how confident can we be in a full recovery of the economy?
Elizabeth Warren, chair of the Congressional Oversight Panel; professor of law at Harvard University