WASHINGTON — The Obama administration is indicating dissatisfaction with efforts to date to modify mortgages across the country, and now plans to step up the pressure on lenders to do more. A $75-billion, taxpayer-financed effort called "Making Home Affordable" and approved earlier by Congress has not delivered the kinds of results the administration had envisioned, and many of the loans being modified through the federal program remain in a trial stage and have yet to be made permanent.
In an interview with the New York Times, Michael S. Barr, assistant secretary for financial institutions with the Treasury Dept., said "banks are not doing a good enough job. Some of the firms ought to be embarrassed, and they will be."
Barr indicated the federal government will seek to shame certain lenders, by publicly naming institutions it believes are moving too slowly to reduce mortgage payments. In addition, Treasury will wait until borrowers' rate reductions have been made permanent before paying cash incentives to lenders in exchange for changing those terms.
To date, there have been just 2,000 permanent loan mods made as part of Making Home Affordable, even though some 650,000 borrowers are in the program.
