The Congressional Oversight Panel of the Troubled Asset Relief Program criticized the Obama administration's efforts to forestall foreclosures, arguing they have been ineffective.
As Treasury Secretary Tim Geithner testified before the panel, members pointed to a Treasury Department report released Monday that showed that 350,000 homeowners have received a permanent loan modification, but 430,000 have been removed from the Home Affordable Modification Program.
The panel's chairman, Elizabeth Warren, also said the program is not working. "Is it time to rethink whether or not a mortgage foreclosure prevention program that is based on a group of servicers whom you describe as having done a terrible job, is a program that perhaps should be redesigned?" Warren asked Geithner.
The Treasury chief defended the program by saying homeowners were kicked out of it because they were unable to verify their income. The Treasury initially allowed trial modifications with little or no verification of income to speed up the process but later changed that policy when modifications were not becoming permanent.