Elizabeth Warren, Bailout Watchdog: Obama Foreclosure Plan Inadequate, Needs New Direction

Huffington Post -- Add Elizabeth Warren, the Harvard Law professor-turned-crusader for Main Street and the middle class, to the growing list of experts calling for the Obama administration to scrap its failed foreclosure-prevention plan in favor of one that would actually help troubled homeowners keep their homes. The Congressional Oversight Panel that Warren heads issued a new report Wednesday, concluding that the government's $700 billion bailout program did in fact help stabilize the financial system -- but has largely failed to boost lending or prevent foreclosures.

In a conference call with reporters Tuesday night, Warren spelled out just how dramatically the administration signature foreclosure effort, called the Home Affordable Modification Program, has fallen short:

• Nationwide, only 10,187 homeowners have received permanent mortgage modifications. That's only 4.7 percent of those enrolled in three-month trial plans. In October, Herbert M. Allison Jr., the Treasury Department's assistant secretary for financial stability, told the panel that Treasury had internally forecast that "up to 75 percent" of trial modifications would achieve permanent status.
• Of the 79 mortgage services enrolled in the program, only 10 have received payment for successfully modifying loans on a permanent basis. They earned $2.3 million for their efforts. By contrast, the administration had set aside $50 billion in bailout money for modifications on mortgages not owned by government-backed mortgage giants Fannie Mae and Freddie Mac.

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