[Peace-discuss] Obama's fake concern

[C. G. Estabrook]

  [Obama & the Democrats have worked hard to rescue the American economic elite 
from the effects of the financial crisis and the recession, and they have been 
quite successful: the wealthy in America are better off today than before the 
the 2008 crisis. But for most Americans, the situation is far different. Obama 
has had to pretend to help the majority - there are after all still elements of 
democracy in the polity, dangerous to the elite - but it's a sham, as is being 
increasingly recognized. That's why the political class is attacking the 
"tea-partiers" so furiously: we can't have a recognition of what's really 
happening getting out. But occasionally things like the following surface.]

Nearly 50 percent leave Obama mortgage-aid program
By MARTIN CRUTSINGER, AP Economics Writer – 54 mins ago

WASHINGTON – Nearly half of the 1.3 million homeowners who enrolled in the Obama 
administration's flagship mortgage-relief program have fallen out.
The program is intended to help those at risk of foreclosure by lowering their 
monthly mortgage payments. Friday's report from the Treasury Department suggests 
the $75 billion government effort is failing to slow the tide of foreclosures in 
the United States, economists say.
More than 2.3 million homes have been repossessed by lenders since the recession 
began in December 2007, according to foreclosure listing service RealtyTrac Inc. 
Economists expect the number of foreclosures to grow well into next year.
"The government program as currently structured is petering out. It is taking in 
fewer homeowners, more are dropping out and fewer people are ending up in 
permanent modifications," said Mark Zandi, chief economist at Moody's Analytics.
Besides forcing people from their homes, foreclosures and distressed home sales 
have pushed down on home values and crippled the broader housing industry. They 
have made it difficult for homebuilders to compete with the depressed prices and 
discouraged potential sellers from putting their homes on the market.
Approximately 630,000 people who had tried to get their monthly mortgage 
payments lowered through the government program have been cut loose through 
July, according to the Treasury report. That's about 48 percent of the those who 
had enrolled since March 2009. And it is up from more than 40 percent through June.
Another 421,804, or roughly 32 percent of those who started the program, have 
received permanent loan modifications and are making their payments on time.
RealtyTrac reported that the number of U.S. homes lost to foreclosure surged in 
July to 92,858 properties, up 9 percent from June. The pace of repossessions has 
been increasing and the nation is now on track to having more than 1 million 
homes lost to foreclosure by the end of the year. That would eclipse the more 
than 900,000 homes repossessed in 2009, the firm says.
Lenders have historically taken over about 100,000 homes a year, according to 
RealtyTrac.
Zandi said the government effort will likely end up helping only about 500,000 
homeowners lower their monthly payments on a permanent basis. That's a small 
percentage of the number of people who have already lost their homes to 
foreclosure or distressed sales like short sales — when lenders let homeowners 
sell for less than they owe on their mortgages.
Zandi predicts another 1.5 million foreclosures or short sales in 2011.
"We still have a lot more foreclosures to come and further home price declines," 
Zandi said. He said home prices, which have already fallen 30 percent since the 
peak of the housing boom, would drop by another 5 percent by next spring.
Many borrowers have complained that the government program is a bureaucratic 
nightmare. They say banks often lose their documents and then claim borrowers 
did not send back the necessary paperwork.
The banking industry said borrowers weren't sending back their paperwork. They 
also have accused the Obama administration of initially pressuring them to sign 
up borrowers without insisting first on proof of their income. When banks later 
moved to collect the information, many troubled homeowners were disqualified or 
dropped out.
Obama officials dispute that they pressured banks. They have defended the 
program, saying lenders are making more significant cuts to borrowers' monthly 
payments than before the program was launched. And some of the largest mortgage 
companies in the program have offered alternative programs to those who fell out.
Homeowners who qualify can receive an interest rate as low as 2 percent for five 
years and a longer repayment period. Those who have successfully navigated the 
program to reach permanent modifications have seen their monthly payments cut on 
average by about $500.
Homeowners first receive temporary modifications and those are supposed to 
become permanent after borrowers make three payments on time and complete all 
the required paperwork. That includes proof of income and a letter explaining 
the reason for their troubles. But in practice, the process has taken far longer.
The more than 100 participating mortgage companies get taxpayer incentives to 
reduce payments. As of mid-June only $490 million had been spent out of a 
potential $75 billion the government has made available to help stem the wave of 
foreclosures.
___
AP Real Estate Writer Alan Zibel in Washington and Alex Veiga in Los Angeles 
contributed to this report.

http://news.yahoo.com/s/ap/20100820/ap_on_bi_ge/us_mortgage_aid