US Treasury Loan ModificationOne thing is for sure, three years have passed and countless government home saving press releases have been showered on the people. Yet, three long foreclosure years later, these failed initiatives and press releases with no teeth have done little to assist struggling homeowners save their homes.

I have watched Moe Bedard for just as long blog about these failed programs until he was blue in the face. Several years later, he is still blogging, ranting and his face has turned from a pale blue to a look that is now deathly white. When I asked him about this new Treasury Mortgage SWAT Teamand reporting methods, he shouted across the office, “Don’t you think if the governnent really wanted to help, they would have done something meaningful to make these mortgage servicers truly help homeowners by now? Come on Johnny, haven’t you been reading my blogs for the last few years?”

He explained to me (I mean ranted) that the lack of effort is due to contract law, banks, economics and real estate market bottoms. He said that the government is not in control and the homeowners losing their homes are what he calls the “sacrificial homeowner sheep.”  Lenders are sending homeowners who must being sacrificed to the foreclosure God’s for the greater good of the US economy. The quicker we reach a real estate bottom, the faster they can kick start the real estate and mortgage market.  He feels the government is sold on this idea because it can try and fast track a Main Street recovery based on the buying, building and the selling of real estate.

Moe makes a lot of market sense. It’s definitely not what any good person would want to hear or report to struggling Americans. But most likely the reality of the situation at hand. A situation that is not getting any better.

According to Michael Barr, the assistant secretary for financial institutions of the U.S. Treasury department (statements made after the several important changes have been announced), companies which do not deliver when it comes to the loans of homeowners who are struggling will have to face consequences. But do these consequences actually exist? And if they exist, are they really all that much of a threat to lending institutions?

The Treasury acts based on the contracts it has with banks and these contracts leave them little room to maneuver and even more so, the program tends to represent a disappointment to everyone aside from Treasury officials and banks. About 650.000 loans have been modified, with an average payment reduction of $576 per month but not all of them have become permanent because they haven’t been in trial long enough.

Pleasing everyone is always a challenge. But the question of the day is, “Will the Treasury Department be on top of things as they have over the last three years?”

Moe Bedard
My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications.