http://finance.yahoo.com/loans/article/107247/paper-avalanche-buries-plan-to-stem-foreclosures.html?mod=loans-home&sec=topStories&pos=8&asset=&ccode=
See it for what it is just another scam to appease public reaction for their outrage
on what can only be seen as a massive manipulation scheme created by the financial banking system and their cronies to satiate their need to feed their greed.
Paper Avalanche Buries Plan to Stem Foreclosures
by Peter S. Goodman
Monday, June 29, 2009
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Somewhere on earth, there must be a more difficult task than this: persuading American mortgage companies to lower payments for homeowners who can no longer afford their loans. But as Karina Montenegro struggles to accomplish this feat for a troubled borrower, she strains to imagine a more futile pursuit.
Ms. Montenegro, an intern at a local company that seeks loan modifications, dials Washington Mutual to check on the status of an application for a homeowner whose income has plummeted. She endures a Muzak-scored purgatory while on hold. Syrupy-voiced customer service representatives chide her for landing in the wrong department. She learns that the documents her company sent in have simply vanished — for the third time since November.
"I don't know what happened," says a customer service officer who identifies himself as Chris. "I don't know if there was a glitch in the system, whether it was transferred from one call center to the other."
Think of the documents as being part of a pile massing inside the bank, Chris suggests. "This pile is not going to be moved forward at any point in time."
Ms. Montenegro and her colleagues suffer these sorts of excruciating exchanges all day long. It is a potent indication of the difficulties afflicting the $75 billion taxpayer-financed program created by the Obama administration in an effort to avoid foreclosure for as many as four million distressed homeowners.
Under the plan, the government offers mortgage companies $1,000 for each loan they agree to modify, then another $1,000 a year for up to three years.
Hanging in the balance is more than the fate of individual homeowners. The administration portrays its mortgage program as a crucial piece of its broader effort to restore vigor to the economy. If the effort fails, foreclosures will continue to surge and home prices will probably keep falling, sowing fresh losses in the financial system and threatening to crimp credit anew for businesses and households.
Yet in the four months since the Treasury Department announced the program, millions of new homeowners have slipped into delinquency and foreclosure. For now, progress is constrained by the limited capacities of mortgage servicing companies, said Michael S. Barr, the assistant Treasury secretary for financial institutions. He offered the first signs of the administration's impatience with the institutions that control home loans.
"They need to do a much better job on the basic management
