Foreclosure Aid: States Fall Short on Short Sales

HAMP will not be effective until short sales are addressed
HAMP will not be effective until short sales are addressed

A couple of weeks ago, I wrote about the $1.5 billion in new Home Affordable Modification Program funds exclusively for states with the biggest home price drops: California, Florida, Nevada, and Arizona (Michigan somehow made it in, too). Now the Treasury Department has announced Part 2 of that project – another $600 million for states with super-high unemployment: Rhode Island, North and South Carolina, Ohio and Oregon. Unfortunately, it misses its mark.

Let's be clear: The cash aid to the unemployed will bring badly needed relief to a lot of families. (As the Huffington Post reports this week, most are not seeing great results from HAMP.) But until short sales and deeds-in-lieu go from the last option to the first, the system will continue to be rigged in lenders' favor.