Liberals love to construct Utopian fantasies to explain why things are the way they are, govern based on their constructed fantasy, and then stand around wondering why all of their programs go down to utter failure. A good example is Barack Obama’s failed Mortgage Modification program.
Although the credit crisis occurred because the government and groups like ACORN forced banks to loan money to people who could not pay it back, the Democrats convinced themselves that the banks – specifically the boogeyman “predatory lenders” – tricked people into loans that were impossible to repay.
Then Obama and the Democrats created “Loan Modification,” charging banks with the task of modifying the loans to allow for better terms for these deadbeat borrowers. After all, these good people in houses they can’t afford just need the chance to get themselves out from under the thumb of The Man, right? Then everything will be OK.
Surprise! It didn’t work. I’ll save the failed Obama administration the trouble of convening a commission to find out why. The deadbeats are still deadbeats and the people who couldn’t provide documentation for their loan applications still can’t. As a result, we’re no closer to solving the problem that caused the recession.
The truth is, unless Obama comes up with some way to “modify” the loan payments for these deadbeat borrowers down to zero, it’s never going to work. It’s just another in the long line of Obama’s wastes of good money.
Executives of two of the nation’s largest banks, Chase and Bank of America, testified in Congress this morning that as many as 85 percent of delinquent mortgages are failing the Administration’s loan modification process because homeowners haven’t made trial payments or have failed to supply the necessary documentation to support their claims.
[...]
“We are now working very hard to convert homeowners to permanent HAMP modifications, but we are facing challenges with borrowers completing documentation or making trial plan payments as agreed,” said Molly Sheehan Senior Vice President for Housing Policy, JPMorgan Chase. Chase has offer to modify 199,033 loans, 16,131 are approved for permanent modifications but only 4302, or two percent, have been permanently modified
Of every 100 Chase borrowers accepted for the program, only 15 will receive lowered monthly payments. 29 borrowers did not make all required payments under their trial plan, 20 borrowers did not submit all documents required for underwriting; 31 customers submitted all required documents but the documents do not meet HAMP underwriting standards which could be due to missing signatures or documents that are not current under the HAMP rules; and 20 borrowers completed all required documents and are eligible for underwriting.
[...]Jack Shackett, credit loss mitigation strategies executive for Bank of America, said that 50,000 of the 65,000 Bank of America customers in the program have failed to provide documentation. The 15,000 who supplied correct documentation are experiencing a good conversion rate.
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