The Resolution Trust Corp., created by Congress to supervise the massive savings-and-loan bailout, has dropped a costly effort to computerize its inventory of $110 billion in seized assets, the Los Angeles Times reported Saturday.
After spending $100 million on failed computer systems, the RTC has virtually abandoned efforts in Washington to keep detailed records on thousands of parcels of real estate and other assets that it is trying to sell.The central headquarters of the RTC will instead maintain only limited information on its vast inventory of real estate and loans from failed thrifts.
The job of keeping track of those assets will fall to local officials, who often depend on handwritten files and improvised computer networks on the assets from some 700 failed thrifts.
"Instead of having a fully operational Cadillac, we can get the job done with a Chevette," RTC spokesman Stephen Katsanos told the newspaper.
The agency, created in 1989 at the height of the S&L scandal, is in the process of shutting down most of its offices and dismissing nearly half of its 8,000-person work force.
But some are expressing concern over the RTC's decision to abandon two of its central computer systems and severely restrict use of a third.
Rep. Bruce F. Vento, D-Minn., a member of the House Banking Committee, warned that the cost of the S&L bailout could balloon by billions of dollars because the RTC will lack detailed records.
"You ought to know what you own, who is working for you, what they are doing with the properties," Vento told the Times. "These are fundamental questions."
The RTC's computer system has been fraught with problems, according to congressional investigators and the RTC's inspector general. For example, the cost of a system IBM developed to track thousands of real estate properties has soared to $52 million from the original contract price of $24 million.
By contrast, the Department of Housing and Urban Development spends $7 million a year for a computer system that supplies instant information on more than 70,000 single-family houses it owns.
The RTC's computer system, called Real Estate Owned Management, is slow to provide information, and its database is filled with errors. A $73,000 Phoenix home, for example, is listed as being worth $79 million.