Loan Modification Plans Fail, Banks Not to Blame

loan modification
loan modification

So it appears that some Congress-critters are agitating about the utter failure that is the suite of government loan modification programs. House Republicans want to repeal the Home Affordable Mortgage Program (HAMP), calling it a "colossal failure". Home Affordable Foreclosure Alternatives (HAFA), a sub-program, is also under attack, and lo and behold, there's a Democrat involved: Sen. Ted Kaufman.

The Treasury Department spent $4.3 million on incentives to servicers and investors through the Home Affordable Foreclosure Alternatives program through November, a fraction of what it spent on HAMP, according to a report from the Congressional Oversight Panel.

It seems only natural that a Democrat would be offended that the government spent too little money. In any event, it's a bipartisan effort in Washington.

But why? Even the government isn't this incompetent most of the time. What happened? And what's likely to happen as a result?