Treasury Department Secretary Timothy Geithner warned the Congressional Oversight Panel Thursday that a national foreclosure moratorium in the wake of the robo-signing scandal would only hurt home prices. Earlier this week, COP, which was mandated by Congress to oversee the Troubled Asset Relief Program, released a scathing critique of the Treasury's foreclosure-prevention initiatives such as the Home Affordable Modification Program. At a hearing Thursday, Geithner said the Treasury's policy has always been that banks not foreclose until they are "certain of their ability to do so on a legal basis," but he scorned any consideration of a full-scale moratorium. "As demand for housing slows, people will be unwilling to buy, and people sitting in their neighborhoods will see prices drop further because the market sees a much longer time of recovery," Geithner said. The nation's largest mortgage servicers froze foreclosures in October when employees and attorneys were found signing affidavits en masse and without a proper review of documentation. At the time, many called for a national moratorium for all lenders. No such mandate ever came down, and those servicers have since restarted foreclosures as they've changed procedures and resubmitted faulty affidavits. Geithner touted TARP, and continued to implore its necessity to a financial market in crisis. He also said HAMP "has helped catalyze the market to provide millions of loan modifications" either directly through the Treasury's own funding or through private programs modeled on HAMP. But HAMP's numbers have dropped over the last few months as servicers work though a backlog of trial modifications. When COP released its report earlier in the week, Sen. Ted Kaufman (D-Del.), chairman of the panel said, "The program is turning out to have a lot less impact on the market than we thought it would have." Geithner said there is a gap between the 5 million homeowners currently in delinquency, and the roughly 2 million who are eligible for HAMP and the Federal Housing Administration's modification program. The others, he said, fall into other programs, but many are individuals who took out loans on expensive houses, can afford to stay in their house based on debt-to-income ratios, and some were investors who bought another house. "You have to decide to extend the benefits of these programs to these Americans," Geithner said. "We did not think that was a good use of tax-payer money." Geithner did say the damage of the housing crisis is still "profound and tragic" and that much work remains to be done. "One thing governments have learned in dealing with these crises is you have to keep at it. You have to keep working on it. You cannot stop working on it too early," Geithner said. Write to Jon Prior.