Watchdog Panel Chair Warren Calls for TARP Accountability and Transparency

Elizabeth Warren, a professor at Harvard Law School and chairwoman of a watchdog panel responsible for overseeing the Troubled Asset Relief Program (TARP) of the Treasury Department, has called on members of Congress to demand more accountability and transparency in the appropriation of remaining TARP funds.

According to Warren, lawmakers should consider the issue of whether the remaining 50 percent of the $700 billion TARP fund will be used for foreclosure prevention.

The incoming administration of Barack Obama is planning to overhaul the TARP program after its implementation has been criticized by lawmakers.

Obama’s administration is expected to introduce a program that will help reduce the number of foreclosed properties.

Warren said that she is pleased that Obama’s administration is committed on providing solution to the problem of foreclosures.

In a report released by Warren’s panel, it cited the failure of the Treasury Department to explain how it is choosing financial institutions for its estimated $250 billion rescue program.

The watchdog panel also criticized the Treasury Department over its handling of the foreclosure crisis which is considered as a major contributor in the ongoing economic upheaval.

Treasury officials decided against using a portion of the TARP funds to reduce the number of foreclosed homes because they worried about the effectiveness of any foreclosure prevention program. They were also concerned that the program would not be fair to homeowners who are struggling to pay their mortgages.

Instead, Treasury officials have relied on efforts of government-sponsored enterprises, Federal Home Loan Mortgage Corp. and Federal National Mortgage Association to voluntarily modify loans.

Furthermore, the watchdog panel’s report criticized the Treasury Department for failing to explain why it refused to require all recipients of TARP funds to adopt a loan modification plan by the Federal Deposit Insurance Corp.

Citigroup Inc. agreed to use the loan modification program in an effort to help the government reduce the number of foreclosure homes.