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Why Is the Treasury Not Releasing Data on Who’s Getting Loans?
At the end of this month, for the first time ever, the US Treasury plans to release to the public a treasure trove of demographic information on people who have received loan modifications. That is, if the government releases the information as promised – information that has a critical impact on policies that prevent home foreclosures.
So far, the Treasury has stalled on making this key information available, despite requests by housing and consumer advocacy groups and media organizations, including New America Media, under the federal Freedom of Information Act (FOIA). Loan modifications are changes made to the terms of a home loan and could include such things as being granted a different interest rate, a principal reduction, or a decrease in how often the loan must be paid off.
Housing advocates say they have been waiting for the Treasury to the release the information for more than a year.
National Consumer Law Center attorney Geoffry Walsh, whose organization filed a FOIA at the end of 2009, says the Treasury still hasn’t provided the information. Walsh says his group requested data detailing why borrowers were denied loan modifications.
“There were promises from the FOIA people that they would be sending [the data]…and that just went on and on for months,” he said. “They sent a few relevant things, but nothing substantial pertaining to what we asked for.”
New America Media first asked the Treasury for race and ethnicity data of those who received loan modifications under President Obama’s Home Affordable Modification Program (HAMP) last September. A Treasury spokesperson said the information would be released at the end of October. The release date was then pushed back to November. New America Media submitted a FOIA request last November, and is still waiting for the requested data. The Treasury now promises to release the data by the end of the month.
“Any delay in publishing the file is to ensure all proper precautions have been taken to protect homeowner privacy - our utmost concern,” Treasury spokesperson Andrea Risotto, said in an emailed reply to New America Media.
For housing advocates, the delay means not having access to critical data that could shed light on who’s getting loan modifications, which has been the key policy for preventing foreclosures, according to Kevin Stein, associate director of the San Francisco-based California Reinvestment Coalition.
The number of foreclosures nationally continues to rise and Stein believes they could reach 12 million by 2013.
“Many people will still need help,” Stein says, “and [loan modifications are] still the main way people will get help.” But, there’s little public information about who is getting the loan modifications and the terms of the deal, “except [what is] in the hands of the banks.”
According to Stein, in much the same way that demographic information on lending has revealed racial disparities, the HAMP data could be used to ensure fair housing laws are not being violated. The HAMP data has limitations though, as 80 percent of loan medications occur outside of the program, Stein said, citing figures by bank regulators.
Walsh of the National Consumer Law Center says his organization was denied a request for information about a calculator that loan servicers use to determine who qualifies for a loan modification. The calculator, referred to as a net present value (NPV) calculator, takes inputs such as the borrower’s income, property value, length of time behind on payments, credit score, and modification amount and “shows if the investor would do better under the loan modification or by foreclosing,” Walsh said.
The request was denied on the grounds that it was proprietary information. “Basically, they said it belongs to Fannie Mae and private businesses,” Walsh said. “We don’t agree with that.” The group appealed the decision, but the appeal was also denied. “Under HAMP rules, if the NPV test shows that the loan modification is the better option, the servicer has to do the loan modification, they can’t foreclose,” he added.
Homeowners have expressed frustration with the lack of transparency on the part of the bank, while trying to modify home loans with their lenders. Walsh says at least two changes set to begin next month will offer homeowners more transparency about their loan modification process.
As a part of the Wall Street Reform Act of 2010, banks will be required to list the figures that they used in the NPV calculator in denial letters to homeowners. In addition, Walsh says, the Treasury has said it will make the calculators available in the spring. That too, remains to be seen.
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11 Comments so far
Show AllThe short answer to the WHY ISN'T THE TREASURY...question in the headline is:
Although candidate Obama promised transparency, the Obama Administration has been transparent only when organizations like ACLU sued the Administration for their refusal to be transparent.
I'd like to clear this up once and for all - it's not me.
More Obama's "...openness and rule of law..." It's time to consider impeaching this lying asshole. I'm a long time liberal and Obama is a fascist by definition. We need to get him out of office!
Many people do not realize that moneyed people have near total control over government policy. Even our elections are rigged. We get to choose between candidates who all represent the interests of the same small group of Americans. The treasury is a private club that is owned by that same small group of Americans.
"Any delay in publishing the file is to ensure all proper precautions have been taken to protect homeowner privacy - our utmost concern," Treasury spokesperson Andrea Risotto, said in an emailed reply to New America Media.
If someone was given a loan modification, I would think that modification should be recorded at the county Registry of Deeds in order to maintain an accurate chain of title. If by law the modification of terms needs to be properly recorded, then it it becomes public knowledge and therefore no need to "protect homeowner privacy".
Is it really the homeowner they want to protect?
Oh YES MEN, could you do something for fun? Only if you wouldn't get arrested though, because I really like you guys.
Wouldn't it be fun to send foreclosures to buildings ,like the U.S. Chamber of Commerce, or if there were unknown whistleblowers in banks that wanted to have fun, since banks seem to be targeting a lot of wrong houses, those bank workers could help. It might be fun to send people at the top some fun foreclosure notices.
I don't think that some of the people at the top realize how awful it is to for real live people stuck in this Bankers' Kafka World. I am reading about so many sad stories, and I can't figure out why the government doesn't seem to care at all.
Maybe all the world's money is in the Cayman Islands and the banks really don't have any money at all.
Well, YES MEN, if you could find a way to do this "fun" or as they say,"'A teachable moment," and without getting yourselves into trouble, I think that the nation would really enjoy this. It would be nice to have some comedy after all of this human tragedy.
A couple of points...
* Can we now say that at one time it was government policy to stimulate home "ownership" for a variety of reasons, while, given the above article, one could argue that the existential opposite is now true? Look at the impediments to retention of homeownership presented in the article. Almost overnight, mortgages being the peculiar instrument they are, the people's equity was sucked out, while by every metric, the Obama Administration is doing virtually nothing to mitigate the pain of Main Street, while restoring profit to Wall Street. He lacks all comprehension of infrastructure, taking it for granted. This probably also goes for most of the Congress, who would have difficulty changing a tire, let alone replacing the hard drive in their computer.
* Dean Baker is perhaps the most accessible economist in comprehending the nature of the Housing Bubble and how that market could be restructured in a democratic way. My view is that he is essentially saying that, when the uber-market has sucked the value out of real estate and mortgages, we need a "reset button" on what we call mortgage "value". OF COURSE, the banks oppose this, because they profit from both ends of the crisis, which is why they refuse to negotiate as they are subsidized by first the Bush Administration (Hank Paulson) and then by Obama. Hey, "homeowner" with a mortgage (and a now-diminished 401 (k)), we just ripped you off, and we are not about to save yore stupid ass.
* For some time I have wondered why the Freedom of Information Act (FOIA) has not been repealed. It came out of the Nixon/Watergate years, when it was recognized that Executive Secrecy had led to massive criminality. (There were many heroes then!) This article explains why: the guvment agencies just keep stalling, and stalling, and stalling, until the requested information has lost its currency. That has also been my personal experience.
Very telling article. It sure got me to thinking.
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If Obama is bad, wait until the next Republican gets the job.
The new one always make the previous one look good. Obama's job was to pave the way for the next stage, full-blown police state.
The answer is simple. We are now a fascist nation. It has been in the works for decades and the Supreme Court's Citizen United decision was the last nail in the coffin. While we may wish to focus on any number of other serious concerns, if we don't massively rally to nullify this SCOTUS decision, nothing else we do matters.
Precisely.