Modification blunders bedevil U.S. housing recovery - Yahoo! News
Three years after the foreclosure crisis began, the process to apply for a loan modification remains a bureaucratic nightmare that is complicating the housing recovery and could dull the impact of any Obama administration initiatives in the works.
The administration's biggest foreclosure-prevention effort, the Home Affordable Modification Program (HAMP), targeted to help 3 million to 4 million homeowners, has reached only about a quarter of that since its 2009 inception.
Thanks to Fred Pilot for the link to this update on the failed HAMP program. The basic premise of this approach was that the banks would voluntarily enter into loan modifications if the government gave them monetary incentives to do so. That premise has proved to be mistaken. There is no way banks will do anything voluntarily unless it makes them bigger and richer. The fact that they have been bailed out by the taxpayers from the costs of their own mistakes is of no consequence to them. They just want more.