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Obama Administration Won’t Release Mortgage Modification Figures; Sense on Cents Already Did

Posted by Larry Doyle on November 11, 2009 2:50 PM |

No news is good news, right?

Well, that may work in raising teenagers but when it comes to public policy in general and housing policy specifically the American public deserves to know what is going on. Why? American taxpayers are picking up the tab, that’s why.

Regrettably, our wizards in Washington are often reluctant to provide the transparency the American public deserves.

I witness this dynamic again today in reviewing a story on the mortgage modification program. The Wall Street Journal puts a positive spin on developments in the mortgage modification process by writing, Mortgage Program Gathers Steam After Slow Start:

The Obama administration said Tuesday that its mortgage-modification program has enrolled one in five eligible homeowners, a sign the effort is gathering momentum after a slow start. But so far few of those trial modifications are turning into permanent fixes.

The Making Home Affordable program has begun trial modifications for more than 650,000 borrowers since it was launched in February, according to data released Tuesday by the Treasury Department. That amounts to 20% of those eligible for the program. More than 217,000 trial modifications, or roughly one-third, were under way in just two states: California and Florida.

The program provides financial incentives to mortgage companies and investors to reduce loan payments to affordable levels. The Treasury Department said the program was on track to meet its goal of offering help to between 3 million and 4 million borrowers over the next several years. Those who are 60 days or more delinquent on their mortgages or at risk of imminent default are eligible.

Whether the program will ultimately be judged a success will depend upon how many trial modifications become permanent. To receive a permanent fix, borrowers must be current on their payments in the trial program after three months and submit a hardship affidavit and other documents.

The administration won’t release figures on completed modifications until December…

Won’t release figures on completed modifications until December? Why not? What’s up with that?

Where can one turn to find this information? You’ve come to the right place. I addressed this very point on October 29th in writing “Mortgage Modifications: Statistically Insignificant.” In that commentary, I highlighted the following:

• 1,080 borrowers had successfully completed the trial period and received HAMP modifications.

Yep. A whopping 1,080 borrowers have successfully completed the trial period and received modifications. A full .5% of those modifications that had started. Yes, a full 1,080 homeowners.

What was the source of that information? A Review of the TARP produced in October by the General Accounting Office. Check page 93 in the report. It’s right there. A full 1,080 mortgages.

Won’t release information? Come on. You don’t think The Wall Street Journal has access to that information?

When our political leaders are not held to account, American interests are not served.

The American public deserves so much better.

LD

  • beth s

    wsj… well we know where they stand, you’ll get filtered news with just about every US organized newspaper. Along w/ the TV newsmedia. I now wonder just how much info the Feds give out that is real or contrived/ skewed?
    So who do we trust?…
    Wasn’t there a TV show called Who Do We Trust?
    Wonder why Main St has become so cynical.

    Keep on diggin LD.

  • J6Pack

    LD,

    Thanks again for all your posts.

    Check you blog numerous times/day.

    Keep it up and keep posting the good stuff

    – J6P

  • fiscalliberal

    While well intentioned, the loan modification program has not worked in part due to the complexity of the securitization system, no incentive for the servicers to modify and most of all borrowers that cannot meet normal requirements for a loan. To lie about your income is no longer accepted.

    When it is all said and done, fraudulent borrowers, crooked underwriters, and complex securities (CDO squared) have left a mess that just has to be defaulted and cleaned out. Mark to model accounting tricks smooth out, but delay the recovery. Until the that is done, recovery will continue to be slow. I wonder if the smaller banks will start picking up real estate loans after this is all said and done. The shadow banking system might be unsustainable.

    Could I suggest the power of your blog is the collective data gathering from a lay persons perspective that has a unique characteristic.

  • Mike

    Why is it so hard to complete the trial period?? and how much have we spent on this project?

  • Larry – The Treasury has a site that produces a monthly score card on HAMP mod activity. It’s located @
    http://www.makinghomeaffordable.gov/docs/MHA%20Public%20111009%20FINAL.PDF

    • Larry Doyle

      Tim,

      Thanks for that link. Having just reviewed the site, it does provide a wealth of information on TRIAL modifications but NO info on the COMPLETED modifications. In fact, I would say the site tells the readers here very little new from what was already included in the TARP review embedded in my commentary.

      I repeat my premise: why won’t the administration release the info? It’s fairly easy to answer. The statistics on the successfully completed mortgage modifications are an embarrassment.

      America deserves to know that info. I am happy to provide it.

      The administration needs to be held to account in the midst of these multi-billion dollar commitments, given that they are American taxpayer funds.






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