Housing News

Mortgage Modification Just Got Even Weaker

A report reveals how Obama’s housing plans fall short of expectations.

Remember how Obama’s critics rated his performance after a year? Even Obama himself didn’t think he was exceptional (in fairness, he’s inherited a lot of headache from Bush). The Associated Press writes, “President Barack Obama ends his first year in office with his to-do list still long and his unfulfilled campaign promises stacked high… Obama’s campaign ambition has been diluted with a pragmatism that has been the hallmark of Year One — without much of the progress he had hoped.”

Now, there’s more disappointment for White House. In what could be the most honest report I’ve read this year (by this, I mean “real numbers” put out), the Congressional Oversight Panel reports that the administration’s mortgage modification program isn’t working well. CNNMoney.com reports, “Only 168,708 homeowners have received long-term mortgage modifications under the president’s plan, as of February, a small fraction of the 6 million borrowers who are more than 60 days behind on their loans… The president’s foreclosure-prevention plan will likely assist only 1 million troubled borrowers, short of the administration’s original goal of up to 4 million homeowners. The program is funded with $50 billion in Troubled Assets Relief, or TARP, funds, putting it under the panel’s purview.”

And what’s more startling are the panel’s words: “For every borrower who avoided foreclosure through HAMP last year, another 10 families lost their homes,” the panel said of the administration’s Home Affordable Modification Program. “It now seems clear that Treasury’s programs, even when they are fully operational, will not reach the overwhelming majority of homeowners in trouble.”

Now that spells disaster. Someone’s investing yet he’s getting lemons out of it.

Having mixed results in a project that is supposed to be the cornerstone of the housing market recovery plan isn’t what anyone expects. And why can’t they solve it?

I believe this all boils down to poor mortgage servicers’ cooperation not to mention their inability to manage their businesses smartly. How many underwater homeowners have received the runaround from the banks? And I can’t count on the incentives that they’d get for every successful modification they make. If it isn’t keeping them motivated enough to give a call back on struggling homeowners, what would it take them to put their best foot forward?

If what we read about frustrating news like these, how would ordinary homeowners still believe that there’s still hope for them?

Obama needs to act now or else homeowners will be dead in the water.

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