Worst $75 Billion Investment Ever?

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At this point, it’s hard to understate how much of a bust the Obama administration’s Making Home Affordable program has been. As I’ve written before, the centerpiece of that initiative is the Home Affordable Modification Program, a $75 billion effort to work with lenders, servicers, and homeowners in order to lower home mortgage payments; when the program was rolled out in March, the administration projected it could help 3 to 4 million struggling homeowners.

Fast forward ten months to yesterday’s testimony by bailout chief Herb Allison. HAMP, Allison told the House financial services committee, has helped “thousands of borrowers” receive permanent changes to their mortgages. That’s it? Predicting this response, Allison went on to say, “Although we know that not every borrower will qualify for a permanent modification, we are disappointed in the permanent modification results thus far. We all need to do better at converting borrowers to permanent modifications.”

If you recall, the Congressional Oversight Panel, led by Elizabeth Warren, reported (PDF) this fall that as of September 1 the number of permanent modifications was a meager 1,711. For a program with $75 billion at its disposal. Bearing in mind the COP’s findings, if the total permanent modifications—i.e., real, sustainable help for homeowners—is still in the thousands as of Allison’s testimony yesterday, then maybe it’s time to state the obvious: This program is a failure. The administration should cut its losses, ditch HAMP, and find a better use for billions of taxpayer dollars in solving our still-roiling housing nightmare, where foreclosures remain at record levels and experts see the pain continuing well into 2010.

A senior director for Amherst Securities Group who testified alongside Allison yesterday said as much, insisting that HAMP won’t help a majority of the homeowners it was intended for. The director, Laurie Goodman, insisted that HAMP was “destined to fail,” adding, “If policies continue to kick the can down the road—working with a modification problem that does not address negative equity—delinquencies will continue to spiral with no end in sight.”

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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