New Orleans President Obama, Secretary Geithner, and the rest of the hapless pickup crew that flubs around in the housing and foreclosure crises came together to “repurpose” yet more of the TARP money that was set aside for home mortgage modifications that might prevent foreclosures and threw $15 billion of the total at some homeowners whose houses are underwater, meaning they owe more than the value of the home. These homeowners are a rarefied bunch. They are underwater, but still up to date on their mortgage, bailing the water out of the bottom of their houses.
Make no mistake though. This program is basically another $15 billion bank and Wall Street investor bailout. The best that one could pretend about this program is that with 6+ million homes facing foreclosure and almost double that many (11.3 million!) underwater that it might prevent the “500,000 to 1, 500,000” the government is spinning who might be miraculously helped by the program avoid foreclosure or maintain their existing modification, if lightening had struck them and they had been able to win one.
I say miraculously, because there is no indication that this program will work any better than the other loan modification disasters the President has had to bless, except that since this is once again a Geithner and Treasury bailout, maybe the banks will actually do some mods in order to actually get the cash. Only banks and investors are eligible for this bailout program, and once again, repeating the mistake they have made in every other loan modification effort, participation is 100% voluntary.