Treasury Secretary Timothy Geithner refused Tuesday to provide Congress' TARP watchdog with a benchmark for measuring the effectiveness of the government's mortgage modification program.
Geithner, testifying before the Congressional Oversight Panel, faced questioning a day after Treasury released new figures indicating that it has rejected more people from the Home Affordable Modification Program than it has permanently accepted.
Elizabeth Warren, who chairs the panel, pressed Geithner to provide a metric or benchmark against which Treasury's record on HAMP could be measured.
"What is the metric for success?" Warren asked, citing a report from credit rating agency Fitch Ratings that most borrowers who get HAMP modifications will default within a year. "Is that a successful program?" Warren asked. "How do we decide when the program is working?"
Despite repeated questioning from Warren, Geithner declined to provide a barometer for success, saying only that Treasury hoped to help as many people as possible with the program.
Panelist Richard Neiman also asked Geithner about the degree of savings for borrowers who were rejected from HAMP but accepted into alternative modifications by their servicers. Geithner said that's "a very hard thing to measure" but added that the HAMP program has prompted servicers to improve their own alternative modifications.
On Monday, a Treasury spokesman told BailoutSleuth that the department does not track or measure the savings provided by alternative modifications.
Tuesday's hearing marked Geithner's fourth appearance before the panel. Unlike previous hearings, the interview with Geithner did not serve to inform the panel on a specific issue; rather, panelists had the opportunity to grill Geithner on a variety of subjects.
Geithner, for his part, spent his two-hour appearance frequently touting the administration's Wall Street reform efforts that are being negotiated in a Congressional conference committee. He also emphasized that Treasury intends to ultimately return hundreds of billions of dollars in unused spending authority by the time the Troubled Asset Relief Program expires later this year.
Geithner also said that Treasury does not plan to ask for TARP to be renewed upon its expiration this year, and the department is not considering any new programs to be used with TARP money.
Warren also pressed Geithner on questions about the danger of banks' commercial real estate concentrations - a subject the panel has previously explored. She said about 3,000 of the country's 8,000 small and intermediate-sized banks have heavy commercial real estate concentrations that may cause hundreds of banks to capsize in coming years. Geithner emphasized the strength of the country's system bank examiners.
"What I'm hearing is, 'no reason to change anything and stay on a steady course,'" Warren said.
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