WASHINGTON (AP) -- The Obama administration's flagship effort to help people in danger of losing their homes is falling flat.
More than a third of the 1.24 million borrowers who have enrolled in the $75 billion mortgage modification program have dropped out. That exceeds the number of people who have managed to have their loan payments reduced to help them keep their homes.
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$75 billion spent and most of these folks are right back into foreclosure. The reason: their mortgages were not the only debts they were struggling with. They had auto loans, credit card debt, home equity loans, etc. This program is like plugging one hole in the hull of a boat that has four holes in it. You just don't sink as fast.
Another reason: banks actually started asking for proof of income. Now they do it...
I'm sure some people who attempted to use the program where honestly in trouble through no fault of their own. These results, however, suggest that the majority of them were dishonest and/or stupid. Throwing more money at them won't change that or make the situation any better.
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