Is the mortgage modification program making things worse? An article in the New York Times gives voice to fears that by encouraging homeowners to stay in homes that they cannot really afford, Obama’s Making Home Affordable program is actually increasing the agony of homeowners, who pour money down the rathole of their mortgage rather than recognizing the loss and starting over. In the meantime, the modification programs disguise the true condition of bank balance sheets (because modified mortgages are not yet non-performing mortgages), and slow down the process of recovery.
How much truth is there to this story?Some, at least. I found myself talking to my father about this after I exchanged blog posts over the tragic case of Tom Vellucci, a Floral Park resident who lost his job and wound up with a non-paying tenant, then drained his savings trying to keep up with a modification that got him current, but didn’t lower his payment. We’re both longtime New Yorkers, so there’s a certain local interest in what happened. We were mystified by why anyone would think that Mr. Vellucci would qualify for a modification–and more importantly, why Mr. Vellucci would have thought so.
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banks are crooked places now i know why wars are started