The reality is a bit different. Larry Summers and Tim Geithner, the Tweedle dum and Tweedle dummest of this administration, persuaded Obama to focus on the banks. “Stabilize” banking by throwing gobs of cash at it and the banks will do the right thing by all those homeowners of distressed properties. Except that the banks didn’t do this. As a report from the Federal Reserve Bank of Boston makes clear, banks make more money from foreclosing on a home than from cutting the interest rate on the loan or adjusting the principal balance. Not that lenders profit from foreclosures – they typically recover less than half the principal owed on a mortgage – but they recoup more of their money than by modifying loans. So there are millions of properties in the foreclosure pipeline and this has to be a major factor (if not the major factor) in gumming up the real estate markets.
As Robert Scheer points out there have been 300,000 foreclosure filings each month that Obama has been in office. And no end is yet in sight. Fewer than 400,000 mortgages have been modified in the entire country to make payments more affordable. The Administration has no plan or policy to deal with this. Everyone agrees that the HAMP loan modification program has been a bust. Almost half of the trial modifications didn’t last. And there is no Plan B.
It’s time to shake the vaunted economic “team” that got us into this mess. No, it’s way overdue. No, these boobs never should have been appointed or listened to in the first place.
As for Megan Woolhouse, this sort of “can’t see the forest for the trees” reporting is shameful.
