Speaking at the Politico Playbook lunch Monday in Washington, former Treasury Secretary Timothy Geithner said that the Obama Administration “tried to do as good a job as we could in our limited authority.”
For critics on both the right and left, the White House's best wasn't good enough.
The former Treasury secretary told attendees that the White House was focused, to the exclusion of everything else, on preventing the collapse and failure of the financial system.
The former central banker also told luncheon attendees that “boosting the flailing housing market was terribly hard” and that "nothing the administration did ever amounted to what people deserved.”
Salon, normally a friend to any progressive politician or executive, wasn’t nearly as generous in its own assessment of Geithner and the Obama administration with its headline “This man made millions suffer: Tim Geithner’s sorry legacy on housing.”
It also criticized the lack of action on HAMP and the Home Affordable Refinance Program.
“I saw some of the excerpts about housing and I must say I split my side in laughter because Tim Geithner personally and actively opposed mortgage refinancing, constantly,” economist Glenn Hubbard said. “And now he’s claiming this would be a great idea in the country.”
In an interview with Ezra Klein, Geithner plays the classic three-card monte trick of taking credit for every single refinance in the entire country, a number surpassing 20 million. In reality, HARP just hit 3 million refis this February, with the overwhelming majority of them coming after 2012. In the darkest years of the recovery, failing to engage in mass refinancing, particularly for those underwater homeowners (who owed more on their houses than they were worth) who couldn’t get a refi without government assistance, really missed an opportunity to put more money in homeowner’s pockets that would get spent.
On the more critical issue of helping homeowners stay in their homes, Geithner looks even worse. One smoking gun in the debate is the continued presence, throughout the Geithner tenure, of Ed DeMarco, a Bush-era official running the Federal Housing Finance Agency, the conservator for Fannie (Mae) and Freddie (Mac). DeMarco blocked both refinancing for underwater borrowers and principal reductions for struggling homeowners, seen as the strongest and most sustainable way to keep people in their homes. The administration made no effort to remove DeMarco from his post despite claiming to be at odds with his policies.
Geithner said that although he wishes there was more the White House could have done, its actions helped millions of people avoid foreclosure.
Geithner details the Obama administration’s actions on housing in his new book “Stress Test” – and while Geithner praises President Obama, it’s worth noting that in only two states of the union addresses did Obama mention housing.
Homeowner advocates haven’t been so kind about the administration’s housing efforts.
They cite the lack of reach with Treasury’s HAMP in March 2009, and the limited effect of HARP.
The White House originally claimed in 2009 that 3 to 4 million homeowners would be helped, but less than half the low estimate – just 1.4 million homeowners —had a loan modified under HAMP as of March.