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They've turned the program on its head. Instead of helping homeowners, they're using it to increase their own profits. Rather than just foreclose on the house, they tell the homeowners they're eligible to apply for a loan modification. They drag out this process for as long as they can so the homeowners will keep paying the smaller monthly payments. Finally, they tell the homeowners the modification has not been approved after all, and demand late fees and a big lump-sum payment (because they haven't been making their full payments). THEN they foreclose on the house.
It is a scam, but in the deregulated world of finance, nothing is unethical if the bank can profit from it.
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