Obama's Foreclosure Plan a Success (Half of One, at Least)

Saturday, March 13, 2010 , , 2 Comments

There isn't much to say about this, least of all "I'm shocked" or "OMG you have to be joking me!" - more like "yeah, and?"


About 90,000 distressed borrowers have lost their mortgage aid under the government's foreclosure prevention plan, and many more are at risk of losing the help, according to Treasury Department data released Friday.

Many of those borrowers did not turn in required documents to prove they qualified for the program, which typically lowers mortgage payments by more than $500 a month. Some applicants earned too much under the government's formula, while others made too little and were unlikely to be able to keep up even with the lower payments.

Under the program, which was launched a year ago, borrowers could receive a loan modification after a phone conversation with their lender and then have three months to prove they qualified for the program and to make the initial payments. Then they would be moved into a permanent loan modification.

But the Obama administration was forced to loosen those guidelines as lenders struggled to collect all the required documents, including pay stubs and tax returns. Although more than 1 million borrowers have had their payments lowered under the federal program, about 500,000 have passed the required three-month threshold without receiving a permanent loan modification.

Wait a minute, that's 90,000 borrowers who got aid and lost it because they didn't meet Treasury's requirements and then another 500,000 who "pass the required three-month threshold without receiving a permanent loan modification" whatever the hell that means.

Realizing they could not recruit known skeptics like Financial Armageddon's Michael Panzner and Naked Capitalism's Yves Smith to their side (sketchy Treasury meeting anyone?), perhaps the Treasury decided to stick with Plan B in inviting raging liberal bloggers to their last blogger pow-wow. JDA isn't bitter that she hasn't been invited or anything, I don't know if Tim Geithner has been groomed to handle the likes of me. Hell, he can't even handle a bunch of Chinese students.

Anyway, the PR push seems odd but forgivable; the Treasury has one hell of a pitch to shove and somehow have to tailor it to convince just about everyone they have a clue what they are doing. They have to convince China to jump back in the T-bill game, convince America they aren't screwing our great-great-grandchildren into being on the hook for an impossible bill, convince the smarmy bloggers to keep their traps shut... it's a rough gig, I get it.

But uhhh... who is buying it?

This is a pathetic show by our friends at the Treasury but most of these people shouldn't have been in houses anyway so I guess that's what has to happen. I've said it before and I'll say it again: enough already with the help, Treasury. We're so much better off without it.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


Anonymous said...

"Many of those borrowers did not turn in required documents to prove they qualified for the program, which typically lowers mortgage payments by more than $500a month."

FBI classifies mortgage fraud in two categories: Fraud for property and fraud for profit. Many of the "victims" of the current "mortgage crisis" were doing number one or number two or in some cases number one and number two at the same time. Buy (with massive leverage of course), live (2 years or less), flip (to next greater fool using massive leverage), rinse, repeat. When valuations stopped climbing (market ran out of "next greater fools") then their chickens came home to roost. Musical chairs with other people's money - what could go wrong. I actually had people get pissed at me (borrowers included) because I wouldn't participate in this bullshit. Thought I was some sort of killjoy hard ass because I wouldn't "play ball" with idiotic no-documentation lending. Conventional underwriting out the window in exchange for processing speed and after hours drinks with assclowns I don't even like???? Thanks, but no thanks. Mr. Market is going to get his say, one way or the other. I don't care if Obama tears can in fact cure cancer - it's fucking over (finally). It's the old "we can do this easy or we can do this rough" phrase. I'm hoping "rough and prolonged" - I want to see that bunghole get stretched out six different ways to Sunday.


Great foreclosure plan!