Obama Loan Program May Extend Foreclosure Crisis, Watchdog Says

The Obama administration’s main foreclosure-prevention program risks helping few borrowers and may do more harm than good by “merely spreading out the foreclosure crisis” over several years, federal investigators said.

While Treasury officials still publicly proclaim the Home Affordable Modification Program, or HAMP, will help 3 million to 4 million borrowers, internally they project that about half that number will receive permanent alterations to their loan terms, the Special Inspector General for the Troubled Asset Relief Program wrote in the report.

Click to expand...

Neil Barofsky, the Treasury's Special Inspector General for the Troubled Asset Relief Program, said the Obama administration's $75 billion Home Affordable Modification Program (HAMP) has a definition of success that is "essentially meaningless."

...

In its latest monthly report, Treasury said there were 1,003,902 active loan modifications through February and 168,708 of those have been made permanent. That was up from 946,735 active loan modifications and 116,297 permanent loan modifications through January. But just 2.8 percent of the 6 million borrowers with loans delinquent more than 60 days have had their loan modifications made permanent through February. And the number of homeowners with loans delinquent more than 60 days is rising far faster than the number of loans being made permanent each month.

As of January, there were 5.6 million homeowners who were 60 days or more behind on their payments. That means about 400,000 more people fell behind on their payments from January to February, compared to about 50,000 who received a permanent modification in that same period.

Click to expand...

Shares of American International Group (AIG) are off 16 cents, or half a percent at $33.23, after Kenneth Feinberg, the “special master for compensation” for the Treasury Department, set new rules today that no executives be paid more than a half a million per year in cash salary at AIG and the four other wards of the state, Chrysler, Chrysler Financial, General Motors, and GMAC.

...

So, what about the $900,000 that Fannie Mae (FNM) gave CEO Michael Williams for this year, as it announced back in December?

Click to expand...