Research

Back in March we noted that President Obama’s $50 billion program to modify the mortgages of struggling homeowners was achieving less than stellar results. The program was initially expected to assist 4 million homeowners, but that was revised down to only 2 million homeowners. Now we’ve learned it’s actually much worse:

The Treasury reported Monday that nearly one in four homeowners who were offered lower payments under the Obama administration's 15-month-old effort have been weeded out of the program.

In a rush to appear to be doing something for the housing market the Obama Administration never bothered to check the eligibility of struggling homeowners and instead fast-tracked them straight into trial payments. As a result, of the 1.2 million homeowners accepted into the program, only a quarter of them have been able to obtain permanent loan modifications and another quarter – 280,000  – of them have been dropped from the program altogether. The Wall Street Journal reports that by pushing borrowers into new loans, without checking their means to pay, many are now worse off than they would have been without the government’s intervention.

Eager for quick results, the Obama administration last year prodded banks to start people on trials without first obtaining documents proving they were eligible. That has led to many crushed hopes. . . While awaiting answers, some borrowers keep making payments, exhausting their savings in what may be a futile effort to save their homes. They also incur fees from the banks and delay taking action that might give them a fresh start in a more affordable home. . .

Many of these ineligible homeowners would have been better served by a quick sale or foreclosure but instead they were duped into following the administration’s politically motivated guidance. So, while he certainly looked busy trying, Obama's good intentions ultimately left many homeowners with fewer options to get back on their feet and all of us deeper in debt.