President Obama's mortgage modification plan provided assistance to only 7% of borrowers who signed up last year, further adding to the chorus of boos for the much-hyped program. The Associated Press reports that :
"BofA has completed modifications for only 1.5% of the more than 200,000 borrowers it has enrolled, while other companies are processing applications much faster. Ocwen Financial and Carrington Mortgage Services, have completed modifications for more than 40% of their enrolled borrowers."
Amy Pyle took a look at several individual stories of American homeowners looking to take advantage of the program in our faces of loan modification series, but the problems with the system can really be boiled down to three factors:
It involves the federal government.
It involves people who are broke.
It involves stupid, overworked, apathetic employees at large banks (like Bank of America) that don't see loan mods as a profit center and are unwilling to devote the resources to making it happen. Selling credit cards is much more profitable.
Of course, the government can lean on the banks to get the numbers up -- 7% leaves a lot of room for improvement. But there are just too many systemic problems with the idea of loan modifications for it to ever be a success in any meaningful way.