As I once heard brilliant financial guru Steve Forbes say (paraphrase) “. . . we had a chance to fix the mortgage crisis back in ’07; if we had just let it crash, it would have been painful, but we would have recovered in 6 months.” A free economy tends to correct itself, but it’s just not the nature of government(s) to leave things alone. That’s why we have to endure this mess for years instead of months, and why we have new government programs every time another one fails. Whatever it takes to prevent economy from it’s natural course: stretch the band, kick the can down the road, etc.
Since 2008, when foreclosures finally got the nation’s attention, congress and the administration has been trying everything they can think of to keep the economy off its inevitable course. So every few months we get another program: TARP, Cash-For-Clunkers, HAFA, etc. Not only are none of these programs working, they seem to be making the problem worse, and like all government programs are easy targets for fraud.
It gets even more frightening when you can’t tell if the fraud is intentional. Case in point is HAMP, the Home Affordable Modification Program. The evidence is pretty clear that one way or another, most loan mods fail. So along comes the government (again) with another program trying to revive a dead animal. Is it intended to assist borrowers, or abuse them?
“What people entering the HAMP modification process don’t understand, until they are out on the street, is that it wasn’t designed to limit foreclosures; it was intended to expedite them” (Geroge W. Mantor, RISMedia 8/17/2010).
Sound incredible? Check out these two links:
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- Treasury Admits HAMP Was a Banker ‘Bust Out’ [Mike the Mad Biologist] (scienceblogs.com)
- TARP And HAMP Are Not Working (realestateradiousa.com)