ABC News Political Punch Blog: Architect of Obama's Housing Aid Program Leaves Treasury

by Matthew Jaffe

Seth Wheeler, who designed the Obama administration's foreclosure prevention program, has left his post as a senior advisor at the Treasury Department.

Wheeler, who started at the agency under the Bush regime's Treasury Secretary Hank Paulson, has reportedly gone to work for Habitat for Humanity.

He played a key role in crafting the $75 billion Home Affordable Modification Program, which offers incentives to banks to modify the mortgages of struggling homeowners in an effort to help them avoid foreclosure.

In the year since its implementation the program – known as HAMP – has been criticized for failing to stem the foreclosure crisis. To date it has only helped 230,000 homeowners obtain permanent loan modifications.

At a Senate hearing last week, Treasury Secretary Tim Geithner said the administration was "troubled" by reports that banks are using a variety of practices to avoid helping homeowners.

"None of this is acceptable," Geithner said. "And we are working very hard to make sure servicers do a better job in holding up their end of the bargain."

Lawmakers on both sides of the political aisle, as well as non-partisan government watchdogs, have blasted the program in recent months.

The Senate's number-two Democrat Dick Durbin told Geithner at last week's hearing, "These servicers keep telling people, ‘Do it all over again, do it all over again,' trying to wear them out," Durbin said.

At a hearing last month, Rep. Maxine Waters, D-Calif., told Treasury official Phyllis Caldwell, "The fact of the matter is our constituents are unhappy and they're constantly bombarding us with the problems of your voluntary modification programs."

House Republicans Darrell Issa of California and Jim Jordan of Ohio have written to Geithner arguing that the program has "failed."

And a handful of watchdogs – including bailout inspector general Neil Barofsky and Elizabeth Warren's Congressional Oversight Panel– have said that the program is not keeping pace with the foreclosure crisis.

However, the administration has emphasized that over a million homeowners have received temporary help in the form of trial loan modifications.