Yesterday’s godawful foreclosure numbers for the month of April should’ve kinda offered a clue that mortgage modification schemes have flopped. Completely.
The NYT reports today that Obama wants to improve on his
Hope for Homeowners plan after just 55,000 modification offers have been extended — a sizable number, but not nearly enough to have nay widespread impact.
Still that’s better than the original scheme which saw a mere 50 mortgages modified in two months. That’s right 5-0.
Actually it’s even worse than that. The company that wrote all but one of those modifications is under legal investigation.
The goal of the program is still to help 3-4 million homowners, which is wildly ambitious considering the numbers so far. Still, the administration hopes that will be solved, in some part, via more homeowner education and a more developed mortgage modification infrastructure at the banks.
The real problem here is that, even if the administration can figure out how to operate the program smoothly and effectively, it will still be a drop in the bucket. By the end of the year, 20 million households will likely be underwater.