I've written a good deal about Making Home Affordable, the Obama administration's comprehensive plan to stop foreclosures and shore up the housing market. The actual mechanics of the plan are smart, but execution is a challenge, especially because of the need to rely on banks without bankruptcy loan modification while we still don't know how they will be held accountable. Statistics on the plan's deployment are still unavailable (I'm working on it), but the New York Times reported yesterday on consumers who aren't getting the help they need:[W]hen Eileen Ulery called her mortgage company — Countrywide, now part of Bank of America — the bank did not offer to alter her mortgage. Rather, the bank tried to sell her a new loan with a slightly lower monthly payment while asking her to pay $13,000 toward the principal and a fresh $5,000 in fees.Her problem was that she did not yet present a big enough problem to merit aid. ... A Treasury spokeswoman, Jenni Engebretsen, confirmed that homeowners like Ms. Ulery — current on their mortgages yet grappling with a hardship like unemployment — were eligible for loan modifications under the program. She said mortgage servicers had offered to modify more than 100,000 loans since the department announced the program.But how many loans have been modified? Ms. Engebretsen declined to say, noting that the Treasury was working with mortgage companies to “fine-tune reporting systems.”A spokesman for Bank of America Home Loans, Rick Simon, confirmed that the bank offered Ms. Ulery refinancing and not loan modification. The bank is now focusing on modifications only for those borrowers “who are already in severe threat of foreclosure,” he said.The story reflects more the confusion surrounding the broad plan less than it's actual failure; it may be a good thing if banks are actually focusing on consumers are in more danger of foreclosure than Ulery is. But it is clear that the administration has not been pushing hard enough on financial institution participation and accountability, especially in the wake of bankruptcy modification's failure.
-- Tim Fernholz
