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JEREMY HOBSON: More criticism this morning for a federal mortgage modification program included in the TARP bailout. TARP’s congressional watchdog says the program, called HAMP, has left billions of federal dollars unspent and millions of homeowners dissatisfied.

Marketplace’s Janet Babin reports.

JANET BABIN: The Treasury Department bailout set aside about $50 billion to help distressed homeowners reduce their mortgage payments and stay in their homes. But so far, the program’s only spent $4 billion, helping far fewer than hoped.

Former Democratic Senator Ted Kaufman chaired the panel. He explains one reason why the programs has come up short:

TED KAUFMAN: The people who are actually handle the loans between the borrower and the lender, these folks got more money, frankly, foreclosing than they did modifying. So it was to their advantage to foreclose and not to modify.

Kaufman didn’t call the mortgage modification program a failure but says it needs to regroup. Between 8 and 13 million home foreclosures are projected by 2012.

In New York, I’m Janet Babin for Marketplace.