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1/3 Have Left Obama Mortgage Program

From an unfazed Associated Press:

Borrowers exit troubled Obama mortgage program


June 21, 2010

WASHINGTON — The Obama administration’s flagship effort to help people in danger of losing their homes is falling flat.

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.

Last month alone, 155,000 borrowers left the program — bringing the total to 436,000 who have dropped out since it began in March 2009.

About 340,000 homeowners have received permanent loan modifications and are making payments on time.

What’s this? A government program that is does not work as promised? The hell you say!

Administration officials say the housing market is significantly better than when President Barack Obama entered office. They say those who were rejected from the program will get help in other ways.

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

Typical is it not? The “troubled homeowners” have to prove that they are Obama voters (wink, wink), after all.

Treasury officials now require banks to collect two recent pay stubs at the start of the process. Borrowers have to give the Internal Revenue Service permission to provide their most recent tax returns to lenders.

The IRS seems to be everywhere these days.

Requiring homeowners to provide documentation of income has turned people away from enrolling in the program

Why is that? Were there really that many people who were trying to scam the system? Or was it just too much trouble to provide two paystubs to get your mortgage greatly reduced courtesy of the US taxpayer?

As more people leave the program, a new wave of foreclosures could occur. If that happens, it could weaken the housing market and hold back the broader economic recovery.

Even after their loans are modified, many borrowers are simply stuck with too much debt — from car loans to home equity loans to credit cards

Well, give Mr. Obama time. He will get to modifying those debts as well, all in the name of ‘social justice.’

So far nearly 6,400 borrowers have dropped out after the loan modification was made permanent. Most of those borrowers likely defaulted on their modified loans, but a handful either refinanced or sold their homes.

Credit ratings agency Fitch Ratings projects that about two-thirds of borrowers with permanent modifications under the Obama plan will default again within a year after getting their loans modified

So what exactly is the point of this program, except to spread around the taxpayers’ money?

Administration officials said their work on several fronts has helped stabilize the housing market. Besides the foreclosure-prevention plan, they cited government efforts to provide money for home loans, push down mortgage rates and provide a federal tax credit for buyers.

"There’s no question that today’s housing market is in significantly better shape than anyone predicted 18 months ago," said Shaun Donovan, President Barack Obama’s housing secretary.

Really? 18 months ago Mr. Obama was being inaugurated after having promised that he would even make the sea levels recede.

The housing crisis should have been child’s play for such a demagogue demi-god.

This article was posted by Steve on Tuesday, June 22nd, 2010. Comments are currently closed.

One Response to “1/3 Have Left Obama Mortgage Program”

  1. Chuckk says:

    Is it any wonder that all sorts of scam artists crawl out of the woodwork when free things are offered?

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