Thursday, April 28, 2011

Public Pension Shortfall Hits a Trillion

Underfunded pension plans have been the norm for as long as I can remember. Most people don't realize that fact, however, until it's too late. Now might be a good time to check up on your employer -Public or Private!

Mathews Realty Group

"Building Lifestyles For Life"

Amplify’d from

Pew: States' retirement shortfall exceeds $1.26 trillion

The gap between the promises states have made for public employees' retirement benefits and the money they have set aside grew to at least $1.26 trillion in fiscal year 2009, resulting in a 26 percent increase in one year, according to a report released Tuesday by the Pew Center on the States.

"In many states, the bill for public sector retirement benefits already threatens strained budgets, and is competing for resources with other critical needs, including education, infrastructure and health care," said Susan Urahn, managing director for Pew Center on the States in a press release. "The $1.26 trillion shortfall for pensions and retiree health care will drive up annual costs and make already tough budget decisions even tougher."


Bad News is Great News For Buyers!

The average medium home price across the US is back to what they were in 2003! If you count all the Homes that sit vacant and all the Shadow Inventory still waiting to come to market, you end up with a number close to 7 million.

Amplify’d from

Housing Crisis Continues to Batter Nation's Homeownership Rate

With the housing crisis still taking its toll, the nation’s homeownership rate slipped further during the first three months of this year.

The U.S. Census Bureau reported Wednesday that the homeownership rate dropped to 66.4 percent at the end of the first quarter. It’s fallen back to a level not seen since 1998. Analysis of the numbers shows that the housing bust has more than reversed the increase in homeownership gained during the boom.

Two million of the homes up for sale were sitting empty during the first quarter and another 4 million empty properties were not even listed, he explained.


Wednesday, April 27, 2011

Housing Recovery In Calif.- Not Yet!

Mathews Realty Group

Retirement Advisor/Investment Services

Self Direct IRA/Solo 401K Plan Specialist

california foreclosures notice of defaults

The reason I think we are still years away from any normal market is the fact that there is still a large appetite for housing.  The current market is now dominated by investors and first time buyers.  These buyers are picking lower priced properties but again, a bulk of these people are speculating even for cash flow purposes.  Psychologically assessing the market I believe sentiment is still too strong in some areas.  The bottom will come when people look at homes more as a place to live instead of an investment.  The California market is facing challenges ahead:

The only things keeping this market together is artificial methods of intervention like the Federal Reserve and accounting gimmicks.  These actions have kept the above data stagnant for a year but how long can this game of pretend go on?  If incomes are not rising then how are households going to pay for their home?  What if mortgage rates start retreating to their more historical average?  Ultimately incomes have to go up or home prices have to go down.


Home Buyer Confidence Gone!

The Greatest Home Buying opportunity of a lifetime! Will you miss it???

Amplify’d from

Americans Shun Most Affordable Homes in Generation as Owning Loses Appeal

The most affordable real estate in a generation is failing
to lure buyers as Americans like Pauli sour on the idea of home
ownership. At the end of 2010, the fourth year of the housing
collapse, the share of people who said a home was a safe
investment dropped to 64 percent from 70 percent in the first
quarter. The December figure was the lowest in a survey that
goes back to 2003, when it was 83 percent.

“The magnitude of the housing crash caused permanent
changes in the way some people view home ownership,” said
Michael Lea, a finance professor at San Diego State University.
“Even as the economy improves, there are some who will never
buy a home because their confidence in real estate is gone.”


Monday, April 25, 2011

Strategic Defaults Hit New High!

Is it a Moral issue or just a Prudent Financial Decision?

In today's market, it's extremely hard to justify the Morality of walking away from one's home. when your local banker is getting rich, with the Feds blessings and at the same time; pointing out that the Home owner has a Moral obligation to pay their mortgage no matter what! Until the Gov. stops supporting all of these banks and mortgage holders (using tax dollars), Strategic Defaults, will only continue to rise! Hey Feds! Are you listening???

Mathews Realty Group

Retirement Advisor/Investment Services

Self Direct IRA/401K Plans Specialists

Amplify’d from

FICO Profiles the Strategic Defaulter

As home prices began heading further and further south, the term “strategic default” made its way into industry jargon…and into the minds of lending and servicing professionals already struggling to keep up with large volumes of borrowers who actually can’t afford their mortgage payments.

Strategic default refers to a relatively new phenomenon where borrowers who have the capacity to make their mortgage payments but choose instead to default, often because the property value is less than what they owe on the mortgage loan.

Experts say continued weakness in the mortgage sector is driving greater numbers of strategic defaults. Studies from the University of Chicago Booth School of Business indicate that in September 2010, 35 percent of mortgage defaults were strategic, up from 26 percent in March 2009.


Thursday, April 21, 2011

Seniors Fear Grows About Retirement!

I remember seeing a TV commercial a few year back, sponsored by a big Insurance Co. The slogan was; "Retirement Isn't The Finish line - It's The Start Of a New Lifestyle". The Big concern and question today is however, What kind of "NEW" Lifestyle are you talking about!?

Mathews Realty Group

Retirement Advisor/Investment Services

Amplify’d from

Seniors fear public policy will derail retirement plans

More than half of retirees responding to a LIMRA survey say changes to Medicare, Social Security programs and increased taxes will affect their ability to afford retirement.

More than 85 percent rely on Social Security and three-quarters benefit from a traditional pension plan for their income, according to LIMRA's research. Forty-four percent of retirees listed investments and taxable savings as an income source; 35 percent an annuity (8 of 10 have a deferred annuity); and about a fourth mention employee earnings, defined contribution plans and IRAs funding their retirement income. More than half of their income is used to pay for basic living expenses.

The study also found that less than half of retirees worked with a paid professional advisor to make investment decisions and only 22 percent had a formal written plan [See related: Retirement advisors ignoring middle-income Americans]. Prior LIMRA research has discovered that retirees who have a formal written plan are far more confident in their financial well being than those who don’t.


NAR Report In Question Again!

Here we go again! Phony facts from the National Association of Realtors. You would think, since the reputation of every Realtor in this Country is lower than dirt, that the NAR, would stop playing politics with all the sales numbers.

Mathews Realty Group

Retirement Advisor/Invesment Services

"Building Lifestyles For Life"

Amplify’d from

Analysts Weigh in on NAR's Existing-Home Sales Report

The National Association of Realtors (NAR) reported Wednesday that sales of previously owned homes rose 3.7 percent last month, following the 9.6 drop recorded in February.

Reaction was mixed after the release of the report. Reuters called the news “a hopeful sign for recovery.” Blogger Stephen Gandel commented, “This month’s data says, once again, the recovery is not yet in sight.”

Referring to statements made by CoreLogic in February that NAR’s measure of home sales is “exaggerated,” Dales added, “What’s worse is that these figures may be overestimating the level of sales by up to 20 percent. Once revisions have been made in the summer, housing demand may look even weaker.”


Wednesday, April 20, 2011

Wealthy Boomers Heirs Out Of Luck!

Amplify’d from

Leaving money to children is not a priority for baby boomers

A survey released Tuesday shows only 49% of wealthy parents say it’s important to leave money to their children when they die. Instead, many people plan to use their savings for travel and to focus on personal relationships, according to the study by U.S. Trust, a unit of Bank of America Corp.

The survey polled 457 people nationwide with $3 million or more in investable assets.

Barely one-third of those surveyed expressed confidence that their children would be able to “handle” an inheritance. And 45% doubt their progeny will have sufficient financial maturity until they’re at least 35 years old.


Tuesday, April 19, 2011

Fannie & Freddie Giving US A Black Eye!

Bailing out Fannie & Freddie could eventually cost taxpayers over $600 Billion, according to Standard & Poor's latest report. Without a plan to deal with the problem, the US AAA credit rating could face a lower rating.

Amplify’d from

S&P Cites Fannie and Freddie as Grounds for Negative Outlook on U.S.

The headline business news Monday was Standard & Poor’s notice that its outlook for the United States has turned negative. The agency maintained its AAA sovereign rating on the U.S. but warned that there is at least a one-in-three likelihood the long-term rating could be lowered over the next two years.

The main culprit is the nation’s growing debt and discord in Washington over the budget, but nestled within S&P’s document explaining its rationale, the agency also cited outlays to mortgage giants Fannie Mae and Freddie Mac as a substantial risk.


Sunday, April 17, 2011

Lenders Making Money From Appraisal's

The Federal Reserves new appraisal rules that went into effect on April 1st, turns out to be a money maker for lenders and banks. Charge the home buyer double the cost and pocket the difference. More legislation is now needed to close a gaping loop hole. Makes you wonder if the Fed. Reserve took the time to read their own bull-I mean bill!!

Mathews Realty Group


Amplify’d from

Lenders still making big money on home appraisals

When you pay $450 to $550 at settlement for an appraisal on a home purchase or refinancing, do you assume that all or most of the money is going to the appraiser who performs the valuation?

That’s logical, but probably not correct. Despite new Federal Reserve regulations, which took effect April 1, that require lenders to pay appraisers fair fees, growing numbers of them say they are still being offered $200 to $250 — even as little as $134 — for work that gets billed out to consumers on settlement sheets at $450 and higher.


Friday, April 15, 2011

Investigation Into Home Buyer Tax Credit

Your Tax payer dollars hard at work!

Amplify’d from

$513 million paid in undeserved homebuyer credits

WASHINGTON — The Internal Revenue Service has paid out more than a half-billion dollars in homebuyer tax credits to people who probably didn't qualify, a government investigator said Friday.

Most of the money — about $326 million — went to more than 47,000 taxpayers who didn't qualify as first-time homebuyers because there was evidence they had already owned homes, said the report by J. Russell George, the Treasury inspector general for tax administration. Other credits went to prison inmates, taxpayers who bought homes before the credit was enacted and people who did not actually buy homes.


The Mortgage Interest Deduction?

Amplify’d from
This article identifies the origin of the tax loopholes used to implement the nation’s housing policy, and proposes a tax benefit which rewards homeownership without first requiring a mortgage debt or resale.
The interest deduction’s legacy

Interest deductions took root in the late 19th century. The first federal income tax was established in 1894 and all forms of interest were deductible. However, homeownership was not what motivated Congress to enact such a policy. An interest deduction was viewed primarily as a business situation.

Most people at that time in history paid cash for their homes (as is the case today in countries with less sophisticated financial systems), and mortgages were generally only taken out by farmers or investors. Not until the 1950s did the home mortgage gain anything close to its current significance. Since then, the home mortgage has become the going concern of the housing industry, and the tax deductions and exclusions are considered entitlements for those homebuyers who must borrow and for those who sell.

The true tax benefits of interest rate deductions were lost long ago — arbitraged away — by increased pricing and interest rates which pass them on to the seller (increased price) and the lender (increased interest and charges).


More Rules Won't Change Anything

Until Politicians understand what goes on behind closed doors and sees first hand, the incompetence behind those doors, passing more legislation, is futile. Getting a short sale approved involves many people and entities. The two most important being the Mortgage Insurer and the Investor(s), holding the note. Without their approval to absorb/take the loss on the sale of the property, the deal won't get done. Of course, the major challenge, is finding the Investors who actually own and hold the note????

Mathews Realty Group

Retirement Advisor/Investor Services

Real Estate IRA Specialists

Amplify’d from

Legislation Introduced to Speed Lender Response to Short Sales

Two lawmakers, one Republican and one Democrat, have joined forces to push federal legislation through that would facilitate wider use and shorter transaction timelines for a foreclosure alternative that some say could be a lifeline for millions of underwater homeowners while drastically reducing the number of empty, repossessed homes lining U.S. neighborhoods – the short sale.

Some market participants, though, aren’t so optimistic, arguing that the government has a host of requirements in place for the banks when it comes to certain housing and mortgage issues that aren’t enforced.


Wednesday, April 13, 2011

Where's The Bottom For Ca. Housing?

Back in 2009 I wrote a three part blog post, entitled "The Looming Double Bubble" For me - The handwriting was on the wall back then. It started with all the sub-prime loans and slowly worked it's way up to the million dollar mansions. Strategic defaults, (walking away when you can pay), have gone from less than 1% to 30%.

Home buyers today have a tremendous opportunity to become home owners but the wait and see syndrome has them frozen in time. The housing market has changed dramatically, and so should the attitude of buyers.

Once again, a Home is a place to live, raise a family, make fond memories that will last a lifetime. And over time - create and build lasting wealth.

Owning a home is still and always will be, one of the best investments you can make! Providing, of course, that you have the right attitude to go along with the buy!

Mathews Realty Group

R.E. Advisor/Investor Services

Self Direct IRA/Solo 401K Specialist

Amplify’d from

Home values continue to decline, outlook grim

San Francisco, Los Angeles and San Diego are included in the nation’s top ten metropolitan areas with the biggest drop in home values since the Great Recession. The latest Standard & Poor/Case-Shiller Home Price Index indicates the composite price of single family residences (SFRs) in the ten cities decreased 2.7% last year. Their composite values are now 30% below levels from the housing market’s peak in April 2006. Worse, no sign exists that price levels will rise soon.

The current price decline we are witnessing was fully expected to follow the premature home purchases induced by government subsidies in 2009 to mid-2010 ― by its end the public was not buying homes on their own volition. Market momentum of the artificially-inflated home prices built up and culminating with the housing price peak in 2006 was ill-fated to collapse, forcing home prices to return to historical trend levels. The continual drop in prices is a result of the real estate market correcting itself as property prices stabilize at their lower and more accurate evaluation. A reversal of the current decline in consumer confidence would be helpful.

Copyright © 2010 by first tuesday Realty Publications, Inc. Readers are encouraged to reprint or distribute this information with credit given to the first tuesday Journal Online — P.O. Box 20069, Riverside, CA 92516.

Tuesday, April 12, 2011

Mortgage Interest Deduction! How Much?

Amplify’d from

Getting the Most from Your Home Mortgage Interest Deduction

Many tax advisors say that one of the most common errors on tax returns is claiming more home mortgage interest deduction than is actually available.  Many homeowners believe that all interest paid on a home mortgage is deductible, but there are limits based on which property secures the debt and how you used the money. 

One of the biggest areas of confusion arises when homes are refinanced to take more money out than the original balance of the loan.  According to the IRS, refinanced acquisition debt is treated like the original acquisition debt, but only up to the balance of the debt immediately before the refinancing.  The rest of the refinanced debt is eligible for the interest deduction only to the extent it doesn’t exceed the $100,000 limit on home equity debt. 

Home Sweet Home Still #1 Investment!

In spite of the worst real estate market in history, the vast majority of Americans believe that owning your own home is still the best investment you can make. The sad reality of that statement of course is the fact that the easy money days to buy a home are over, leaving the American Dream, for many, as wishful thinking Buyers!

Mathews Realty Group

R.E Advisor/Retirement Investor Services

Self Direct IRA/Solo 401K Specialists

Amplify’d from

Confidence in value of homeownership persists through bust, survey shows

An unexpected 81% of U.S. adults surveyed by the Pew Research Center say buying a home is the best long-term investment.

The study results are surprising in that so many households still believe that homeownership is a good investment, even after the plunge in home values that has occurred over the past couple of years," said Celia Chen, a housing economist for Moody's "The preference for homeownership has deep roots in the history of this nation, and apparently even a severe correction in house prices can shake American's belief in homeownership only slightly."
Despite those sentiments, 82% of homeowners who indicated their home is worth less than before the recession said homeownership is the best long-term investment a person can make.

Monday, April 11, 2011

Home Ownership Rates Back to 1998 levels

new family home sales

The current home ownership rate now stands at levels last seen in 1998.  Glass-Steagall was repealed in 1999 and allowed for every exotic mortgage idea to proliferate the market during the bubble.  As it turns out, we did not increase home ownership in any sustainable fashion and simply set our economy down a tragic path chasing easy profits through flips and other get rich quick ideas.  Like Oedipus who later receives the news about his father, the past is coming back to haunt us.

It doesn’t get any lower than that.  The answer is rather obvious if the charts could speak to us.  Many Americans looking to buy can only afford cheaper priced housing.  Saddled with large amounts of debt already, they may not qualify or want to buy a more expensive home.  Unlike the baby boomers who had limited debt prior to buying their first home and also entering a healthy economy, we are in a very different situation here.


Sunday, April 10, 2011

The Housing Market May Never Recover

Having skin in the game, as they say, is a good thing when buying a home. It's all the other changes and requirements that will have a major impact on any future recovery in the housing market! Take a read and see what you think?

Mathews Realty Group

Retirement Advisor/Investor Servicers

"How to Buy Real Estate in your IRA"

Amplify’d from

Changes in mortgage finance rules could hurt housing recovery

The government is proposing to limit the best interest rates and terms to buyers who can put 20% down, meet stringent debt limits and have sterling credit.

But some of the other requirements that federal agencies and the Obama administration are proposing in the same plan have gotten much less attention yet could prove just as troublesome for consumers:


Friday, April 8, 2011

401K Plans Up For Grabs By Major Banks!

Think hard about this one! Billions of Tax dollars go to bail out all these banks, who couldn't manage their own money - Now they want to take over managing yours!? No Thanks!!!!!

Mathews Realty Group

Retirement Investment Services

Self Direct IRA/401K specialists

Amplify’d from

4/6/2011 2:21 PM ET


By Bloomberg Businessweek

Morningstar on MSN Money

Big banks go after 401k trillions

On the prowl to replace lost income, banks are seeking a bigger slice of the growing, $2.9 trillion 401k pie.

Americans held $2.9 trillion in 401k plans as of September, and the total may reach $4 trillion by 2015, according to Cerulli Associates, a Boston research firm.


Keep Your Home Ca. Program Gets More $!

Amplify’d from

California Expands Eligibility for $2 Billion Foreclosure Relief Programs

The California Housing Finance Agency (CalHFA) expanded eligibility criteria for several of the Keep Your Home California programs to make them available to a larger number of families at risk of losing their homes, including those with home equity loans and recently originated mortgages.

Keep Your Home California is a $2 billion federally funded program that provides assistance to low and moderate income California homeowners. Implemented statewide in early February, the programs are part of the U.S. Treasury Department’s Hardest Hit Fund initiative.


IMF Chimes In on US Housing Market!

Amplify’d from

International Monetary Fund Voices Concerns With U.S. Housing System

The International Monetary Fund (IMF) has some pretty direct words for the American government and its handling of the U.S. housing crisis.

In an annual report that will be released next week, IMF says the origins of the global financial crisis can be found in the U.S. housing finance system. The agency says government participation in the U.S. housing market has been “pervasive” but has not yielded the expected benefits to prospective or existing homeowners.

The global organization faults tax incentives and low-income housing goals as contributing to the near collapse of the housing market in the United States.


IRS Targets Real Estate Investors!

Calling all Part time Real Estate Investors! It's time to Pay Up!!

Amplify’d from

Real Estate Losses Become IRS Tax Audit Target


Sorry, real estate investor, the Internal Revenue Service is coming to get you, and it won't be pretty.

The IRS is stepping up property scrutiny as a result of a 2008 Government Accountability Office finding: "At least 53% of individual taxpayers with rental real estate activity for Tax Year 2001 misreported their rental real estate activity, resulting in an estimated $12.4 billion of net misreported income."


Wednesday, April 6, 2011

Big Banks Still Scamming Home Owners!

After being given Billions of Dollars in bail out money and every conceivable perk and incentive you can think of - Big Banks are once again in the drivers seat, calling the shots, and the Government has no clue what to do about it.

Mathews Realty Group

R,.E. Advisor-Investment Services

Amplify’d from

Retribution deferred: lenders prove too powerful to be prosecuted

Lenders are still getting away with highway robbery, according to Nobel Prize winning economist and New York Times Op/Ed columnist, Paul Krugman.

Big Banks have been accused by the AGs of luring distressed homeowners into their loan modification programs under false pretenses. Loan modification programs, known as extend-and-pretend modifications, were designed to squeeze as many mortgage payments as possible out of distressed homeowners, as well as extend the amount of time lenders had before reporting losses to their investors and government regulators. The delay essentially allows lenders to drag their collective feet while simultaneously bilking homeowners. As is now common knowledge, thousands of homeowners were foreclosed on while awaiting a loan modification — modification lenders knew would never come. [For more information on extend-and-pretend mortgage modification programs, see the April 2010 first tuesday article, Surge in loan modification defaults.]


Tuesday, April 5, 2011

New Bill to End Fannie & Freddie!

Amplify’d from

Senators Introduce Legislation to End Taxpayer Support of GSEs

Sens. John McCain (R-Arizona) and Orrin Hatch (R-Utah) have introduced legislation to permanently end government support for Fannie Mae and Freddie Mac.

Both pieces of legislation are aimed at stopping the taxpayer-funded bailout of Fannie Mae and Freddie Mac. Since the two GSEs were placed into conservatorship in September 2008, they have drawn more than $150 billion in taxpayer funds.


Monday, April 4, 2011

The Rewards of Retirement!

Retirement isn't the finish line - It's the Start of a New and Exciting Lifestyle!

Amplify’d from

Publisher Hundreds of Heads has
released the revised and expanded second edition of How to Love
Your Retirement
, specially edited by Barbara Waxman - a nationally
recognized coach for adults, midlife and better. She says that the
conventional notion of retirement should be retired, as the large wave
of more than 70 million Baby Boomers is redefining its meaning.
Boomers are approaching this life stage with the same zeal as they did
their youth and are making retirement an opportunity to begin a new
and exciting life stage. Over the next couple of decades, retirement
will be viewed as some of the best, most productive and rewarding
years of life. 


The White House Confirms HAFA Success!

Make sure you digest and analyze these numbers carefully! Over a Million Foreclosures last year and the year before. Another Million expected for 2011. Also, take into consideration the fact that almost 30 percent of these modifications re-default within six months. Success? I think not!

Mathews Realty Group

R.E. Advisor - Investor Services

Self Direct IRA/Solo "K' plan Specialist

Amplify’d from

Treasury: Nearly 4,500 HAFA Short Sales and Deeds-in-Lieu Completed

Treasury reports that as of the end of February, 4,488 homeowners completed a short sale or deed-in-lieu (DIL) under the Home Affordable Foreclosure Alternatives (HAFA) program. The federal program provides up to $3,000 for relocation assistance after a homeowner exits the home.

Administration officials say that looking at the results behind the numbers, each month HAMP keeps over 25,000 new families in their homes, but the program has had its fair share of critics.

The White House, though, says the continuation of the program is important to reviving the housing market and sustaining the nation’s economic recovery, and President Obama has said he will veto any HAMP-ending bill.


Sunday, April 3, 2011

Housing Survey - More Bad News Ahead!

Amplify’d from

April 1, 2011 (Brian Michael)


A housing panel consisting of economists and real estate experts, predicts that housing prices will likely continue to slide for two more years with a tentative projection of a weak recovery beginning in 2013. Nearly half of the 111 economists polled by MacroMarkets, co-founded by industry expert Robert Shiller, believe the housing market will see a double-dip in housing prices sometime this year.

Overall, the panel predicts that home prices will likely decline another 1.4 percent this year. In 2012, the panel believes that most of the losses experienced this year would be made back with prices finally rising above current levels starting in 2013, with a foreseen gain of only 2.7 percent. Even by 2015, the panel predicts that there will be a gain of less than 10 percent over current prices.

Loeb described the latest survey results as “the most pessimistic collected to date.”


Friday, April 1, 2011

One Million Vacant Homes And Counting!

As this article describes, The Worst is not over yet for Housing in California. The double dip in housing, that's now taking place will linger on for many years to come. This will be the first time in 40yrs, that California, has not led the Nation out of a Recession. The Wait and See Game should be interesting!

Mathews Realty Group

R.E. Advisor/Investment Services

Self Direct IRA/401K Specialists

It might come as a surprise to many that California has 1.1 million vacant housing units.  Back in 2000 California had 712,000 vacant units so over the decade we have increased the number of vacant units by 54 percent.  At the same time total housing units have increased by 11 percent.  The market has a potentially enormous number of homes that should fall into the sales pool.  Keep in mind this figure does not include currently occupied homes where borrowers have stopped making payments.  In California this is a large number.  We are seeing home sales move on lower priced homes and you are seeing this pattern play out in mid-tier markets as well.  The realization is coming slowly but as more and more homes are sold on the margins, future comparable home sales will be based on lower priced transactions (even if this means chopping $50,000 from a $500,000 home).  This is what we are seeing in the median price coming down in many California cities.

california vs median us home price

I think you have many people that bought in 2009 and 2010 now regretting their mistake as they bought into a falling market.  This isn’t the bottom so don’t get caught up in the frenzy.


TARP Turns A Profit-Or So They Say!

Amplify’d from

Bank Bailouts in the Black, Watchdog Asks "And the Toxic Mortgages?"

The bailout programs used to prop up the nation’s banking system are now in the black. The U.S. Treasury announced this week that the investments it made in banks, beginning in 2008, to prevent the sector from folding under the weight of the financial crisis have now turned a profit.

One of Treasury’s harshest critics, TARP Special Inspector General Neil Barofsky, cast his own dark cloud over the program’s proclaimed success, even as his final day in office approached.

Barofsky reminded readers of the original intent of TARP, the intent that was put to lawmakers when they voted on the controversial $700 billion program – to buy up toxic mortgages.

“Treasury promised that it would modify those mortgages to assist struggling homeowners. Indeed, the [legislation] expressly directs the department to do just that,” Barofsky wrote.

But, “almost immediately,” Barofsky said, “Treasury’s plan for TARP shifted from the purchase of mortgages to the infusion of hundreds of billions of dollars into the nation’s largest financial institutions, a shift that came with the express promise that it would restore lending.

He told the New York Times, “The estimates have been consistently off and Treasury has consistently changed the metric for success. In the beginning, they weren’t touting payback – they touted effectiveness. Now, they are touting payback but ignoring the moral hazard this program has created.”