After One Year, Obama Plan to Help Modify Second Mortgages Modifies NONE… Nada, Ziperino!


Well, woohoo!  It’s been just a few weeks shy of one year since the Obama Administration announced its plan to help 1.5 million homeowners modify their second mortgages, and the program has actually done something I did not think was possible.  It’s actually managed to help… no one!

Come on… that’s hard to do.  I mean, even Bush’s Hope-4-Homeowners infamous debacle managed to modify one mortgage after six or so months.  Sure, it was probably just an accident, but this is a big country.  You’ve gotta’ think that no matter how stupid the government program is, one of whatever will simply slip through the cracks somehow.  But in this case… no!  As my Greek in-laws would say… Opah!

Wow.  Someone deserves some sort of prize or at least a plaque of some distinction.  Has this ever been achieved before in these United States, or anywhere else for that matter?

I mean, I would venture to guess that if the government announced a program whereby a U.S. citizen was required to send in $100 in order to receive a bag of flaming dog poo on their front step, well… more than one bag would get delivered… maybe even more than one each month.  Oh sure, the government would probably deliver the bag of flaming poo late and to the wrong address, but still.

The program was a part of the administration’s fabulously successful, $75 billion Home Affordable Modification Program (“HAMP”) that has done absolutely nothing to change the foreclosure crisis for the better, but even it claims 170,000 loan modifications.  Deduct for lender lying, incompetent reporting and political puffery and that still leaves eighty or ninety thousand people that saved a couple of bucks on their mortgage payments at the very least, right?

According to a story in the Huffington Post, the plan was announced last April.  Treasury released guidelines in August.  And five weeks ago, Bank of America, the largest mortgage servicer in the country with three million seconds signed up.  Five weeks ago.  Stop it… they’ve been busy.

But wait… Bank of America’s spokesperson said a few days ago that the bank was STILL awaiting guidelines from Treasury before they would proceed to ignore them.  A Treasury spokesperson responded by saying that the bank could technically begin the process now.  To which the Bank of America spokesperson said: No we can’t.  To which the Treasury’s spokesperson said back: Yes, you could… technically.  To which Bank of America’s spokesperson replied: Your mother could… technically.  To which Treasury’s spokesperson said: Yeah, well I know I am, but what are you?  And then she ran off stage crying.


Last week, Vikram Pandit, who is Citigroup’s CEO and whose name sounds like a Bond villain set to take over the world by blowing a giant hole in the earth’s atmosphere, told a Congressional Oversight Panel why Citi has not yet signed up to participate in the program:

“We’ve said to the Treasury we’re willing to work with them as to what this program is.  We have just seen the details.  I think it’s prudent for us to go through that before we sign on.”

He’s right.  Take your time, Vikram… or Vik… do you suppose it’s okay if I call him “Vik”?  Don’t let anyone rush you into something that might save the U.S. economy.  You just keep focused on how to continue to justify your job and pay out bonuses as you run a bank that should have been placed in receivership ages ago.  We gave Citi $320 billion in loan guarantees last year, along with tens of billions in TARP funds, in case you have successfully suppressed the unpleasant memory of watching Timmy Geithner explaining the accounting shenanigans he’d come up with on television on Monday morning as he stood shoulder with someone from the Singapore Sovereign Wealth Fund.  I haven’t, obviously.

RealtyTrac says there were 3 million homes lost to foreclosure, so figure closer to four, and RealtyTrac admits that this year could be worse.  One reason is that  so many distressed homeowners do in fact have second mortgages. The Obama Administration has estimated that “up to 50 percent of at-risk mortgages currently have second liens.”  So, that’s a lot.

According to the Huffington Post, the fact sheet that came along with the administration’s April 28, 2009, announcement of the second lien program noted:

Second liens contribute to the number of American homeowners unable to afford their housing payments. Even where a first mortgage payment may be affordable, the addition of a second mortgage payment can increase monthly payments beyond affordable levels. In addition, second mortgages often complicate or prevent modification or refinancing of a first mortgage.

The Second Lien Program will help create a sustainably affordable mortgage payment for millions of homeowners who qualify for a first mortgage modification, yet still face challenges in affording their monthly payments because of a second mortgage.

According to Citi’s regulatory filings, about 42 percent of the bank’s second mortgages are now worth more than the underlying assets.  See… plenty of time.  Don’t jump into anything too quickly, Vik baby.  Steady as she goes.
Okay, so it’s only been a year.  We can’t expect miracles from Washington.  They’re busy, and they have a lot more important things to do than deal with problems created by second mortgages.

In a totally unrelated story…

Here’s a congressional schedule from March 21, 2010:

A. H.R. 4840 – To designate the facility of the United States Postal Service located at 1979 Cleveland Avenue in Columbus, Ohio, as the “Clarence D. Lumpkin Post Office”.

B. H.Res. 1174 – Supporting the goals and ideals of National Women’s History Month.

C. H.Res. 1075 – Commending the members of the Agri-business Development Teams of the National Guard for their efforts, together with personnel of the Department of Agriculture and the United States Agency for International Development, to modernize agriculture practices and increase food production in war-torn countries.

D. Up to twenty minutes of debate on a Ryan (R-WI) Unfunded Mandated Point of Order and possible postponed suspensions.

E. Up to twenty minutes of debate on an Earmark Point of Order.

F. Up to one hour of debate on the Rule to provide consideration for the Motion to Concur in the Senate Amendments to H.R. 3590 – Patient Protection and Affordable Care Act – and H.R. 4872 – Reconciliation Act of 2010.

G. Up to two hours of general debate on the Motion to Concur in the Senate Amendments to H.R. 3590 – Patient Protection and Affordable Care Act – and H.R. 4872 – Reconciliation Act of 2010.

See what I mean… they’re busy in Congress and certainly don’t need to be placed under additional pressure by the likes of us, American homeowners, who pay their salaries and hold back the urge to storm the proverbial castle every day… although admittedly most of us accomplish this by taking drugs like Adivan and Zanax.  I, for example, have taken to taking ice baths until hypothermia sets in.

Nice job, Team Obama!  You’ve really accomplished something here.  What’s next?  Come one… we want another government housing rescue plan to watch fail.

I know… I had suggested this when Hope-4-Homeowners was still around, but what would you think about a good old fashioned lottery… or wait… I know… you could hide five Golden Tickets in chocolate Wonky bars.

Whoever finds a Golden Ticket simply calls the government hotline, waits 4-6 hours on hold, and then someone from Housing and Urban Development shows up, pays off a neighbor’s home by mistake, and then sends you a 1099 for a half a million in loan forgiveness, taxable as ordinary income.


Oompa Loompa doompadee doo
I’ve got a government program for you
Oompa Loompa doompadah dee
If you’re underwater you’ll soon live in a tree!

What do you get with a loan mod from HAMP?
A surprise trustee sale and a book of food stamps.
Why don’t you try simply walking away?
Or are you too programmed to obey?

You’ll have no
You’ll have no
You’ll have no
You’ll have no
You’ll have no high credit score!

(No more monthly bills either.)

Oompa Loompa Doompadee Dah
Don’t pay your mortgage, you won’t have to go far
You can rent down the street for much less.
Like the Oompa Oompa Loompas…

And end your distress!

Don’t just shoot it down out of hand… give it some time… consider it for a few days… set it out on the back porch and see if the cat licks it up.  And if you still don’t think it’s worth a try, then what the heck… count me in for a $100 bag of flaming poo!


Come on… chant it with me… Yes we can.  Yes we can.

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