Finally they fessed up! While Neil Garfield refers to mortgage servicers and trustees as pretender lenders. The U.S. Treasury has been playing pretend for months as well and final conceded that the Home Affordable Modification Program (“HAMP”) is a dud. The 10-month-old program is going nowhere, said the Treasury, because big institutions charged with implementing it are dragging their feet. Like this is a surprise?? Imagine how much “better” it will be after these banks pay off their government bailout money and are out from under the watchful eye of Uncle Sam.
After blowing through billions of our tax dollars to prop up the banks, the Obama administration rolled out the $75 billion loan modification plan to show its support for beleaguered homeowners. But it hasn’t worked as expected. Really? Are you kidding me? Is anyone surprised? Please show me the government programs that are run efficiently and effectively!!
Since President Obama announced this program and its ability to save 9 million homeowners our trusted banking partners have completed less than 2,000 permanent modifications according to government audits. To boot, 14.4% of all mortgage borrowers are in default and barreling towards foreclosure.
Additionally, Laurie Goodman, senior managing director at Amherst Securities Group says her research shows that 70 percent of modifications involving only interest rate cuts, rather than reductions in the principal borrowers owe, have failed after 12 months.
Kudos again to Gretchen Morgenson at the New York Times for a great article on HAMP.
- The Bank Slayer
