Obama Government Being Questioned About Failure to Stop Foreclosures

The Obama government is under pressure for failure to stop foreclosures. Increasingly details are being asked for about progress of programmes and measures. Earlier in October Timothy Geithner said that nearly half a million borrowers are participating in the loan modification plans that the government had started to slow down the foreclosure rush.

Richard Neiman, superintendent of New York Bank and a member of COP that supervises the TARP involving $7000 billion said, “But the measure of success for the Home Affordable Mortgage Program (HAMP) is not only the number of borrowers who enter the process. The real test is the number of families who complete the trial modification period and receive sustainable permanent modifications.”

Rep Maxine Walters (Democrat/California) who is the chairperson of House Financial Services Subcommittee on Housing and Community Opportunity is desirous that Geithner sends the details right down to the congressional districts about the number of trial modifications that are underway and how many have been made permanent.

Waters in a letter released on 21st October, “Several issues continue to exist within the HAMP program, including the need for increased (loan) servicer participation and knowledge about the program and additional homeowner outreach.”

The pressure has started mounting two weeks following report released by COP that the government programmes are not adequate enough to tackle the escalating problem. It should be worked out again and stretched forward with the inclusion of new ideas.

Every 13 seconds there is a foreclosure occurring in the country? It is being complicated by the downward slump in the housing market that is destroying billions in property value and threatening to block economic recovery.

Ben Bernanke was pressurized by consumer advocates in a meeting of a consumer advisory council to take more effective protections for the consumers from mortgage loans and credit cards. He attended the meeting for nearly an hour but did not talk about anything substantive. The discussion focused on credit card controls and the disclosures required for the mortgage originators. Bernanke left the conference just before the discussion began on foreclosures.

It is becoming increasingly clear that HAMP that is supposed to bring down monthly payments is not being able to do so because of the continuous changes in the foreclosure crisis. This was reported by COP on 9th October.

The other effort by the government – HARP, is directed at those borrowers who have gone underwater. Here too the success story is not much to talk about.