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EXTEND AND PRETEND: The Obama Administration's Failed Foreclosure Program

• Shahien Nasiripour & Arthur Delaney via THP
President Barack Obama's signature plan to combat the housing crisis has fallen short of its goals -- rather than significantly and permanently reducing home foreclosures, it is only delaying them.

The administration unveiled its Making Home Affordable plan in February 2009. Obama vowed in front of an audience gathered at Dobson High School in Mesa, Ariz., that MHA's signature effort, the Home Affordable Modification Program, would "enable as many as three to four million homeowners to modify the terms of their mortgages to avoid foreclosure."

The $75 billion initiative -- $50 billion from the bank bailout, $25 billion from government-owned mortgage giants Fannie Mae and Freddie Mac -- was designed to induce lenders, servicers and investors to modify distressed mortgages through a series of cash incentives.

It's not working.

In its first year, 1.5 million people were invited to try HAMP. About 40 percent of those who tried it have been kicked out of the program; fewer than that have been given an actual shot at keeping their homes.

When President Obama took office, it took an average of 319 days to complete a foreclosure, according to Jacksonville, Fla.-based data provider Lender Processing Services. Now it takes 461 days.

Extending the process by which homes enter foreclosure allows banks to continue carrying the loans on their books at full value, delaying loss recognition. That allows unhealthy banks to appear healthy, staving off costly bank failures.

1 Comments in Response to

Comment by Richard Baehr
Entered on:

 President Obama made a host of commitments to the american people that made him look like a wonderboy. He new that every commitment he mad was a lie. He had no idea how to forfill his promises. Now 21 months later the true has surface that Obama and his administration haven't the expierence, knowledge, willingness to forfill his commitments. So what does he do, Obama is on a constant vacation and avoids the work that need to be done from the oval office. He's just a complete failure, but a fanstactic con man.   

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