Congressional Panel Is Critical of Obama Mortgage Modification Plan

[Bluebear]

The Treasury Department’s loan modification program, which has been criticized as ineffective almost since its inception, came in for another battering in a Congressional report released Tuesday.

Only about 750,000 households will be helped by the Home Affordable Modification Program, which pays banks to modify loans under Treasury guidelines. That is far fewer than the three million or four million modifications promised in early 2009 by the Obama administration, the Congressional Oversight Panel said.

The panel’s report calls the program a failure, although former Senator Ted Kaufman, a Democrat from Delaware who was chairman of the panel, declined to go that far in a conference call with reporters.

“The program has turned out to be a lot smaller and had a lot less impact on the housing market than we thought,” Mr. Kaufman said.

One reason: the loan servicers, who act as middlemen between the distressed homeowners and the investors who own the mortgage, often find it more profitable to foreclose than modify. The modification program provides incentives for servicers to participate in the program but no penalties for their failure to do so.

http://www.nytimes.com/2010/12/14/business/economy/14hamp.html?src=busln

[Rex]

1. Evidently it is better to ruin lives then save them.

Sad.

[Bluebear]

2. Mortgage Modification: Just Another Way to Slip Billions to Banks

http://www.economicpolicyjournal.com/2009/11/mortgage-modification-just-another-way.html

What. A. Scam.