Wednesday, August 25, 2010

Interesting: Is HuffPo Bashing an Obama Program?

Sure sounds that way. Richard Zombeck: Government Tactic: Help Banks by Lying to Homeowners And HuffPo, is not usually counted among the ranks of the Great Right Wing Conspiracy. Maybe the list has been updated recently.

Now I am not a fan of all the government intervention in markets this Administration has created. I think it is the power of free markets that built this country, and the power of command economies that sank the old Soviet Union.

But I always thought that the Administration was wrong, but had good things in mind. Now it looks like they are just plain wrong all around.
What is most disturbing about the meeting with Treasury and the things that were said, or more accurately admitted, is that an argument could easily be made that this [HAMP] was an overt act by the administration to mislead and trick the American homeowner. That our government has been complicit in the bank's ravaging of the bank accounts, retirement, and investments of nearly five million people.
But then was this the Administration, or the bureaucracy? It's clear HAMP - Home Affordable Modification Program - hasn't done quite what it set out to do. And hurt a lot of people along the way.
Here's what really happens: The trial modification lasts three months according to the rules. Banks and servicers string the borrower along for longer than the requisite three months, sometimes going as long as nine months. At one point, after the homeowner has made all the payments on time at the lower monthly rate fully expecting to be granted a permanent modification the bank pulls the rug out from under them and denies the modification. They give no reason for this and claim that they are under no obligation to provide one. At this point the mortgage goes back to the original terms and amount and here's where the "tax break" argument falls apart. The homeowner now owes the difference between the trial payments and the original payments. So a six month trial modification with a $500 "tax break" is now a $3000 bill on top of the original unaffordable monthly payment. In addition, servicers will add monthly charges, late fees, and reports to credit agencies further burying the homeowner who is now broke, humiliated, and desperate. In many cases, like my loan with Ocwen for example the trial payments never get recorded or applied to any of the interest or principal - they simply disappear.
And of course, government being government, and the fact that this program was thrown together in an instant, there is little in the way of oversight.

Do you wonder why people are walking away from their homes? After a few months in this "trial modification" program, they are worse off than they were before the government got involved. What were those scary words? "I'm from the government, and I'm here to help."

2 comments:

richard said...

I appreciate anytime a story is picked up and you seem to have understood the premise of the post.
I am curious about the title of your post and why you're surprised that HuffPost would publish something against Obama? It's about the news and finding out the truth. Unlike organizations like FOX that are bought and paid for by the right and oh, also pay the right. Media is a tool to keep tabs on our elected officials not a pep rally for them. Thanks you again for reading the piece and for your comments.

Richard Zombeck
HuffPost Blogger and Founder of www.shamethebanks.org

Zendo Deb said...

Fox on the Right.
MSNBC on the Left.

Almost no one in media even pretends to be unbiased anymore. (Or they pretend, they just don't pull it off. Think Journolist.)

HuffPo was way Left in the early days. Haven't looked at it in years. Wouldn't have today if someone hadn't sent me that link.