To no one’s surprise – well, maybe Barney Frank and Christopher Dodd were surprised – President Obama’s vaunted mortgage modification program is a colossal failure.
Forbes.com has the depressing details:
More than a third of the 1.24 million borrowers who have enrolled in the $75 billion mortgage modification program have dropped out. That exceeds the number of people who have managed to have their loan payments reduced to help them keep their homes.
But analysts expect the majority will still wind up in foreclosure and that could slow the broader economic recovery.
A major reason so many have fallen out of the program is the Obama administration initially pressured banks to sign up borrowers without insisting first on proof of their income. When banks later moved to collect the information, many troubled homeowners were disqualified or dropped out.
Many borrowers complained that the banks lost their documents. The industry said borrowers weren’t sending back the necessary paperwork.
“The bank lost my paperwork.” Translation? “This bank is prejudiced. They discriminate against deadbeats like me who have neither the means nor intention to pay them back.”
Source: Forbes
View Comments (10)
The biggest obstacle in the mortgage modification sham, uh, I mean program, is that many people had signed up and filled out paperwork only to be told down the line that they didn't qualify because they missed a payment AND until they were approved, they had to keep making their regular mortgage payments on time. People were looking for quick relief and were hoping their Messiah would come through for them. If it sounds too good to be true, well...it probably is!
I feel for the hard working folks who had 'old fashioned' mortgages (you know, 10%-20%+ down...no NINJA loans/interest only/120% LTV crapola) and through no fault of their own, lost their jobs from the recession and have no where to turn.
I do not feel sorry for those who could not or chose not to do the math on whether they could afford a mortgage based on 0 down, 'stated income', interest only, ARM's (rate is never going to go up, right?), bought McMansions and the list goes on and on.
There is plenty of blame to go around...the borrowers, the lenders but most of all, CONgress for allowing people to obtain mortgages that had no business buying a home. Owning a home is not a 'right'...it is a privilege that unfortunately more and more people are demanding and when they make a poor decision, they want the government to bail them out and/or give them freebies.
There will always be people who will never own a home for various reasons and will be renters for life...is that such a bad thing? In comparison to the meltdown that has affected everyone in some way, I'd say, no.
Hey DJ, What is a "NINJA" loan?
Thanks!
Hi Vic,
NINJA is an acronym for No Income, No Job or Assets.
A lot of loans were done off of 'stated income'..."just bring us your last paycheck as proof of income" (no tax returns). So if you were on strictly commission and brought in a check stub for say, 8k+, they took it that you made that every month, regardless if you did or not.
Well when you have 5 illegal aliens living in a house and all of the males work construction and get paid under the table with no taxes taken out and all the females work at McDonalds it would be kind of hard to show a bank that you can pay the loans
Who ACTUALLY believes that they will get a house and not be asked to pay for it later? What kind of a moron actually believes that there would no payment whatsoever from them to the bank? I just cannot believe it. The mind of a liberal idiot continues to baffle me.
KimmyQueen, I love what you say but I must disagree with it. Notice how the "anointed one" sits and spins while the gulf gusher worsens? He is going to use this to pound through his cap and tax bill, which will destroy our economy further. Notice Obambercare? Before it even goes into effect, 60% of the population want it REPEALED. (not modified)
The original "tea party" was named after an event in the Boston harbor. England was taxing more than the settlers felt was fair, so they tossed the "King's" Tea overboard. What we have here is FAR FAR FAR worse. Now he will use an Executive Order, to ram "Shamnesty" down our throats, and with 20 million people who don't pay taxes voting, the useless suckers will be re-elected.
As long as the Democrats insist that unqualified people be able to own homes, the economy will be a disaster. That's what caused the recession, and now they just try to give us another dose of it. Brilliant.
didn't we do this once before? Is my memory failing?
Democrats allowed an unqualified person be their candidate for president.
analysts expect the majority will still wind up in foreclosure
As did one of my friends -- even though she had the money to make up the missed payments. Go figure.