Surprise: Congressional Mortgage Mod Scheme Flops

It’s really hard to get excited about loan mod schemes when so many people default even after they mod. Some of the schemes, meanwhile, don’t even get that far. They can’t find anyone to sign up:

Washington Post: Secretary of Housing and Urban Development Steve Preston said the centrepiece of the federal government’s effort to help struggling homeowners has been a failure and he’s blaming Congress. The three-year program was supposed to help 400,000 borrowers avoid foreclosure. But it has attracted only 312 applications since its October launch because it is too expensive and onerous for lenders and borrowers alike, Preston said in an interview.

Here’s a real red flag:

“What most people don’t understand is that this program was designed to the detail by Congress,” Preston said. “Congress dotted the i’s and crossed the t’s for us, and unfortunately it has made this program tough to use.”

See Also:
Ouch! Borrowers Keep Defaulting After Mortgage Modification

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