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According to an article in the New York Times, the Obama administration has announced that on Monday it will pressure mortgage companies to reduce payments for more troubled buyers facing possible foreclosure. The $75 BILLION taxpayer-financed modification program aimed at stemming foreclosures has been a colossal failure.
Once again, the administration is pointing fingers at others, and now is blaming the banks and the mortgage servicers for another government billion-dollar bailout gone bad.
The banks are not doing a good enough job,” Michael S. Barr, Treasury’s assistant secretary for financial institutions, said in an interview Friday. “Some of the firms ought to be embarrassed, and they will be.”
Lenders are reducing mortgage payments for borrowers at an increased speed, but most of the loans modified through the Making Home Affordable program remain in a trial stage lasting up to five months, and only a tiny fraction have been made permanent.
Also, a large percentage of modified loans end up in default again. Critics argue that the program was geared toward adjustable rate mortgages that had initial super-low teaser rates. These critics state that the big problem with new foreclosures is job loss and an increasing level of U.S. unemployment, which are the new causes of foreclosures and home loan delinquencies.
The Democrat-controlled branches of government have been obsessed with a government health care plan, and have ignored the famous political axiom "it's the economy stupid", during this country's deepest recession and tightest lending standards since the Great Depression.
But help is on the way. They're going to start focusing on the economy, I'm told, next year.
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