Zombeck.com

Barney Frank (D-MA), Chair of the House Financial Services Committee, and Rep. Maxine Waters (D-CA), a ranking member of the Committee, sponsored an amendment to the Financial Reform Bill that would provide a two year bridge loan to struggling homeowners who have lost their job and can’t afford their mortgage. The creation of the loan program could help as many as 400,000 unemployed homeowners avoid foreclosure.

The provision has made it through the House and the House-Senate Conference Committee for the Financial Reform Bill will decide on or around the 22nd of June whether it makes into the final bill.

The program is based on a successful model used in Pennsylvania. The provision would make loans to unemployed homeowners to help them pay their mortgage for a maximum of two years or until they find new employment, at which time they would be expected to repay the loan amount in full. It would be paid for using federal dollars that have already been designated for foreclosure prevention and like the Pennsylvania model it is based on, could actually produce a profit for the federal government.

This program could be a win-win all around: Homeowners who have lost their jobs through no fault of their own would be provided a loan for two years while they looked for work and got back on their feet; banks would get their money for the next two years; and a portion of the funds allocated to the failing HAMP program wouldn't go to pay servicer salaries and bonuses.

The Obama administration has offered a forbearance of three months to unemployed homeowners, but considering the average unemployment averages 7.5 months, three months would only serve to sink homeowners deeper into financial and emotional despair.

The opposition to this amendment on the part of the GOP is astounding as they continue to hammer away at the middle class, side with the banks, and stack the deck in favor of Wall Street.

Last week Ryan Grim of Huffington Post reported that the House Republicans pushed legislation through the House to punish homeowners who are behind on their mortgages -- an ironic, cruel, and hypocritical use of big government to hold back the middle-class and already cash strapped homeowners. According to a GOP memo, sent last Thursday, "families that have chosen to stop paying their mortgage and instead use the extra money they are saving each month to "buy season tickets to Disneyland...take a Carnival cruise to Mexico...and go out to dinner more often."

"It [sic] disgusts me that the Republicans would use Big Government to interfere with the sanctity of contract," said Dean Baker, an economist with the progressive-leaning Center for Economic Policy and Research.

Of the hundreds of stories we’ve received at ShametheBanks.org from homeowners losing their homes I have yet to read one in which someone is recounting the fabulous time they had on their Mexican cruise or their fun filled trip to Disneyland.

"We started the loan modification process in July and were notified our three trial payments would be close to what the reduced payment would be once approved for final modification 2,800. The 3 mos turned into 7 mos. During this time I am still unemployed and receive the maximum 405.00 weekly in unemployment. We faxed and resubmitted the same documents time and again. Every month we received late statements with no record," writes Lisa Bielawski of Long Island NY in her story - far from a trip to Disneyland or a lavish night on the town.

In addition to wanting to punish homeowners in default, the GOP has also taken to attacking the unemployed, insinuating that they are lazy and shouldn't receive government assistance in the form of much needed and deserved unemployment benefits. Georgia Republican Rep. John Linder suggested Thursday that extended unemployment benefits keep people from looking for work. "And even when businesses are willing to hire, nearly two years of unemployment benefits are too much of an allure for some," Linder said.

Foreclosures across the country have escalated to an estimated 300,000 a month. The banks and many of their allies in Congress would like us to believe that foreclosures are the result of irresponsible homeowners who simply don’t want to pay their mortgage. The simple truth is that unemployment is now the main reason for foreclosure, accounting for 58 percent of all foreclosures according to NeighborWorks America – up from 49 percent in June of last year.

Massachusetts residents brought this problem to Congressman Frank’s attention when 600 people met with him in November. The meeting was sponsored by the community improvement organizations that are part of the PICO National Network of faith based community organizations; Brockton Interfaith Community and the Massachusetts Communities Action Network. Congressman Frank pledged to take action on this issue of unemployed homeowners facing foreclosure and has followed through by getting this amendment passed in the House bill – now its fate remains with the House-Senate Conference Committee on the Financial Reform legislation who will decide this month whether the provision becomes part of the final bill.

In the midst of a GOP tsunami against the middle class this is a buoy of sensibility. What can you do? Contact your member of Congress, particularly if they sit on the House-Senate Conference Committee, and tell them you want this amendment in the final bill. We've provided a listing and sample letter at ShametheBanks.org in this fact sheet provided by Massachusetts Communities Action Network. It contains more information about the amendment, a list of the House and Senate conferees, and a sample letter.

Last month I wrote a piece on ShametheBanks and in HuffPost about an amendment sponsored by Sens. Al Franken (D-Minn.), Olympia J. Snowe (R-Maine), and Patty Murray (D-Wash.) The amendment to the Financial Reform Bill would create an Office of Homeowner Advocate to assist homeowners who have been denied a loan modification through HAMP. This office would provide a much needed outlet for homeowner's who have been denied HAMP modifications, for whatever reason.

The piece generated a number of calls to legislators and was picked up by other notable bloggers and homeowner advocates like Givemebackmycredit.com, MFI-Miami, and 4closurefraud.com.

The hope, in May, was that the amendment would at least make it into the Manager's Amendment and would be part of the final bill. As it happened, there was no Manager's Amendment, but that didn't stop Franken and his allies on both sides of the aisle from making sure it wasn't overlooked. It passed Tuesday evening by a surprising and satisfying vote of 63-33.

True to form, Franken, not being content to give up after he didn't get the amendment into the financial reform bill pushed for it in the Tax Extender Bill (a bill separate from the amendment's original target that deals with unemployment insurance and other safety net legislation. It was passed by the House in March and is currently being debated in the Senate. A very impressive effort that shows Franken's commitment to homeowners and to foreclosure prevention.

"This victory means help for the many [homeowners] who are in danger of losing their homes through no fault of their own," Franken said. "These families are doing their best in a tough economy that they didn't create. And they need to know there's someone who has their back when they're trying to navigate the already stressful system of avoiding foreclosure."

"As Mainers and Americans know too well, these turbulent economic times, in which we have witnessed record high unemployment rates, have been confounded by the housing market crisis and certain mortgage servicers who are, frankly, taking advantage of our nation's families," said Sen. Olympia Snowe, once again showing her loyalties to the American people. A departure from her own party who prefers to believe that, "families that have chosen to stop paying their mortgage and instead use the extra money they are saving each month to buy season tickets to Disneyland...take a Carnival cruise to Mexico...and go out to dinner more often," according to a GOP memo sent out last week.

"By creating an Office of the Homeowner Advocate, these Americans will receive the vital assistance they require when they are faced with the daunting foreclosure system," Snowe continued.

It's well known that the servicers and banks have not been forthcoming in their reasons for denying loan modifications and in some cases have given outlandish reasons to home owners like, "early payments". That wasn't a typo. GMAC denied an Indiana couple a permanent modification because they made their trial payments early.

Anyone having tried to get a loan modified knows it can be a painful and frustrating process. After months of lost paperwork and jumping through hoops at the whim of the servicer, homeowners are left precariously paying trial payments that could go on for several months - well beyond the requisite three months. Once the trial payments are over (and of course collected) a staggering amount of them are denied permanent status with no reason offered by the servicer who still collects the servicing fees from investors, racks up fees and fines on the homeowner's account, and in some cases collects taxpayer subsidies for their "efforts." In many cases the homeowner is slapped with a lump sum of the accumulated difference in the adjusted payments, now making a tough situation even more daunting.

The proposed office would provide a much needed and long awaited means for homeowners to appeal the denial and would provide oversight to a program that up until now has allowed servicers and banks to continue gaming a system they helped destroy and fleece already struggling homeowners.

A former servicer employee and HuffPost reader, Richard Lindow commented on Crucial Help for Homeowners Could Never See the Light of Day about the proposed amendment last month, referring to the provision and defending the servicers:

"The persons speaking with the customers, unfortunately, do not appear to know why a particular action was taken, and, I assume, from articles such as yours and complaints I have received, that lenders do not do a very good job of explaining it either.

If this amendment will help to provide clarity and information to borrowers who really have no idea why they were denied a modification, then please sign me up as a proponent.

If, however, it is merely, another avenue for people to vent who were legitimately denied (e.g., because his pay stubs showed he worked in NY and the property was in FL, and his employer confirmed in writing that he has worked for that company in NY full-time for the last 10 years), then perhaps we should perhaps assess whether this fiasco is worth any more time or money."

I have to say, I agree. If homeowners are in fact to blame for the shoddy results of the HAMP program and the banks and servicers are really working in the best interest of the borrower, but the borrower isn't co-operating, then what better vehicle to prove that? Banks and servicers have been claiming for almost over a year now that denials are a result of uncooperative homeowners. The banks and servicers should be pleased to finally have a government office dedicated to exposing the real reason for 230,000 HAMP applications being denied in April alone. This should finally shed some light on where the blame should be cast and help everyone sleep better at night. After all, there is close to $4 billion in monthly charges, taxpayer subsidies, fees, and fines at stake.

Update: The Senate didn't pass the Extender Bill. This doesn't necessarily mean the amendment won't come back up. In fact  with the vote of 63-33 it got, there's a very good chance it'll be back.

As for the vote on Friday:

"Tonight, every single Republican voted to deny states critical aid that would keep firefighters, police offices and teachers employed," said Jim Manley, spokesman for Senate Majority Leader Harry Reid (D-Nev.). "And tonight, every single Republican voted to tell the one in ten Americans who have lost their jobs that they are on their own."

By the end of this week, 903,000 people who have been unemployed for longer than six months will have missed benefits checks they would otherwise have received had Congress managed to reauthorize the stimulus bill provisions that expired on June 1. By the end of next week, that number will climb to 1.2 million....

"Tonight, every Republican voted to protect wealthy bankers, hedge fund and Wall Street CEOs from paying their fair share of taxes," said Manley. "Tonight, every single Republican voted to allow big businesses to continue to outsource American jobs, and get a tax break for doing it."

Republicans pushed earlier Thursday for an alternate bill that would have extended unemployment benefits but dropped the Medicaid assistance, which Sen. John Thune (R-S.D.) termed a "$24 billion state bailout." The Republican alternative would have reduced the deficit by, among other things, slashing spending at federal agencies. This bill failed by a vote of 41 to 57.

"Poll after poll demonstrates that the voting public wants Congress to protect and support the unemployed and it is time for them to stop playing dangerous games with people's lives," said Judy Conti of the National Employment Law Project, which recently commissioned a poll that showed 74 percent of registered voters think it's more important to preserve jobless aid programs than to reduce the deficit. "The Senate should not recess until HR 4312 is passed, and the House should treat it with the same urgency. The nearly million workers who have lost their benefits while these politicians have used them to score cheap poiints in an election year deserve much better than this."

Here's the rest of that story: http://www.huffingtonpost.com/2010/06/17/senate-jobs-bill-fails-again_n_616732.html?ir=Business

Here's the Press Release from Franken's office:

Franken, Snowe, Murray Homeowner Advocate Amendment Passes The Senate
Bipartisan Amendment To Safety Net Legislation Would Assist More Than 20,000 Minnesotans In Danger Of Losing Their Homes

WASHINGTON, D.C. [06/16/10] – The Senate passed an amendment offered by U.S. Sens. Al Franken (D-Minn.), Olympia J. Snowe (R-Maine), and Patty Murray (D-Wash.) to the safety net legislation now being considered on the Senate floor. The proposal will create an Office of the Homeowner Advocate, funded from existing sources, whose focus would be on assisting homeowners who believe their mortgage servicer is breaking the rules. Currently, these families have nowhere to turn when wrongly denied from the assistance program, or encounter difficulties in navigating the already stressful system of avoiding foreclosure.

The Franken amendment passed with broad bipartisan support, 63 to 33.

“This victory means help for the many Minnesotans who are in danger of losing their homes through no fault of their own,” said Sen. Franken. “These families are doing their best in a tough economy that they didn’t create. And they need to know there’s someone who has their back when they’re trying to navigate the already stressful system of avoiding foreclosure.”

“I could not be more pleased that the Office of Homeowner Advocate Amendment passed the Senate, and by a bipartisan vote. As Mainers and Americans know too well, these turbulent economic times, in which we have witnessed record high unemployment rates, have been confounded by the housing market crisis and certain mortgage servicers who are, frankly, taking advantage of our nation’s families,” said Sen. Snowe. “By creating an Office of the Homeowner Advocate, these Americans will receive the vital assistance they require when they are faced with the daunting foreclosure system.”

“Washington state families who have been hit hard by lost jobs and plummeting housing prices are fighting to stay in their homes,” said Senator Murray. “We need to make sure that the programs we put in place to help these families are actually working and that the big banks are being forced to play by the rules. Giving families a strong voice in this process is critical to preventing future foreclosures and speeding our economic recovery.”

The Office of the Homeowner Advocate is modeled after the successful Office of the Taxpayer Advocate at the Internal Revenue Service. It aims to help resolve problems with the Home Affordable Modification Program (HAMP), a program developed by the U.S. Treasury Department to help homeowners struggling to keep their homes. It would be funded from money that is available for the costs of administering the HAMP program, but is not otherwise committed.

18,800 Minnesotans currently participate in the HAMP program and stand to benefit immediately from the Franken amendment. More could participate in HAMP if the proposal goes through, as the Office of the Homeowner Advocate would be tasked with correcting the mistakes currently denying them eligibility. As the foreclosure crisis goes on, many more people are expected to join the HAMP program, which was originally expected to help three to four million homeowners nationwide.

The Office of the Homeowner Advocate would have three primary functions: To assist homeowners, housing counselors, and housing lawyers in resolving problems with the HAMP program; to identify areas where homeowners are having problems in dealing with the HAMP program; and to identify possible administrative and legislative changes to HAMP.

The Office of the Homeowner Advocate would:

• Have an independent director, appointed by the Secretary of Treasury in consultation with the Secretary of Housing and Urban Development. This director would have a background as an advocate for homeowners and have experience dealing with mortgage servicers. The director cannot have worked for a servicer or for the Treasury Department within the past four years.
• Make the Director available to testify in front of the Senate Banking Committee and House Committee on Financial Services at least four times a year, or at any time at the request of the Chairs of either committee, and issue a formal report to Congress once a year.
• Have staff designated by the Director to have the authority, on a case-by-case basis, to implement servicer remedies, subject to the approval of the Assistant Secretary for Financial Stability. This will help to ensure that the staff of the Office of the Homeowner Advocate actually have the ability to make servicers follow the rules.

This story can also be seen at HuffPost: http://www.huffingtonpost.com/richard-zombeck/finally-some-hope-of-hamp_b_615284.html

Now that Scott Brown has managed to score the same backroom deals he opposed during his campaign run for Senator of Massachusetts he's threatening to vote against the financial reform bill he's said he was for. Sound confusing? It really isn't when you consider Brown is among the top five congressional recipients of "contributions" from the finance/insurance/real estate industry.

An impressive rank to have achieved compared to the other four who have spent years in the Senate.

The usual story of Scott Brown's election to the Senate in MA is that he was put there to kill health care reform. But all the money he's getting from the finance industry makes it clear that they may be hoping he will also be the 41st Republican to kill financial reform. According to his profile on OpenSecrets.org all of his top campaign contributors are financial companies.

In April of this this year, Brown was asked for his opinion on the financial regulatory reform bill. "I can't support it,'' he said.

When asked what areas he thought should be fixed, he replied: "Well, what areas do you think should be fixed? I mean, you know, tell me. And then I'll get a team and go fix it," he said, talking to a reporter who wanted to know what kind of changes he hoped to see.

Brown said one of his main concerns is that the legislation is "going to be an extra layer of regulation," which is true. That's the point of the legislation. The financial industry nearly destroyed the global economy as a result of lacking regulation. That's why this legislation is being argued: to bring oversight and accountability through regulation.

Brown went on to say that he finds the notion of a Consumer Financial Protection Agency problematic because "it's more government." He added, "Is that good? ... If it's an area we need to fix, then I'm certainly open to it. But I haven't heard that that's the biggest thing that's problematic with it."

Sen. Dick Durbin (D-Ill), has been quoted repeatedly as saying, "And the banks -- hard to believe in a time when we're facing a banking crisis that many of the banks created -- are still the most powerful lobby on Capitol Hill. And they frankly own the place."

Brown, who has, by his own admission, carved out deals for Fidelity Investments, State Street, and MassMutual, among other Massachusetts based financial institutions can't make Durbin's point any clearer. In addition he's argued for major loopholes in the Volker Rule that would allow firms to continue to gamble with taxpayer-backed capital.

In the meantime, Brown recently blocked a bill extending unemployment. As a result of this vote 1.2 million people lost access to the extended unemployment benefits. Several hundred thousand are being added to that number every week. Fifty million Medicare claims from June are currently in process at the reduced rate, according to AARP.

The Center on Budget and Policy Priorities estimates that dropping the $24 billion in aid to states will lead to cuts in services and thousands of layoffs, and that spending cuts to close states' aggregate budget shortfall  in 2011 would lead to 900,000 public- and private-sector layoffs.

On a Tuesday morning WBUR interview with Deborah Becker, Barry Bluestone, dean of the School of Social Sciences, Urban Affairs and Public Policy at Northeastern University, speculated that over two million people will be without benefits once the program expires. According to Bluestone, 10,000 people will lose crucial funds every week in Massachusetts alone.

This decision sparked a rally on Monday in front of his Boston office by an estimated 500 protester representing dozens of activist, education, and labor organizations urging Brown to stop blocking a vote on the FMAP bill, containing $700 Million in federal relief.

"Let Senator McConnell, let Senator Collins, let Senator Brown and every other Republican explain why one of their own constituents doesn't deserve to keep their job, shouldn't be able to send their kid to college, can't put food on their table without maxing out their credit cards," said Lori Lodes an employment and labor activists with SEIU. "Rooting against America, Republicans are taking pride in keeping families out of work as their only strategy for winning elections."

Brown's latest argument and rhetoric when it comes to financial reform is that the fees and assessments that the bill requires banks to pay amount to a tax and that he has vowed never to vote for a tax increase.

Of course when Massachusetts residents voted for him they were assuming he meant their taxes, not those of Wall Street.

Statements like those make it apparent that Brown is no less confused by financial reform than he was in April during an interview with the Boston Globe or when I and other Bay-State activists met with his staffer Nat Hoopes in D.C. and were told the only things in the bill Brown was opposed to was the so called "slush fund" in respect to the resolution authority designed to ensure that the banks themselves - not the taxpayers will have to pay for future failings. Now, according to Brown, it's a "tax".

Brown and others in the GOP can call it a tax as much as they want. The truth, which they seem to conveniently avoid, is that it is a fee of $3-4 Billion per year (less than 10 percent of their yearly bonuses) to be collected until the sum reaches $20 Billion. After 25 years the fund would go towards the deficit. A small price to pay for an $800 billion tax-payer bailout and having almost brought the world economy to its knees.

Any time someone alludes to Brown having filled or taken Sen. Ted Kennedy's seat, Brown quickly responds coyly with, "it's the people's seat."

It's become apparent that the people's seat is for sale.

this post is also on HuffPost: http://www.huffingtonpost.com/richard-zombeck/scott-brown-has-put-the-p_b_629666.html

Cross posted in Huffington Post

When you're a bank and the facts aren't on your side, it's apparently perfectly acceptable to just lie.

No side-stepping, no spin, no double talk. Just flat out lie as if no one will ever check your facts or assume that by the time they do it'll all have blown over. It's a lot like a five-year-old covered in chocolate denying he ate the cake.

The New York Times on Tuesday had a piece about someone other than poorly funded non-profits and grassroots public interest groups stepping up for homeowners. New York City's comptroller, John C. Liu, and six large unions plan to begin a campaign to press the biggest banks to do more to prevent foreclosures in the New York area.

Liu unfortunately stopped short of threatening to pull union money out of the banks in retribution saying, "it's premature to talk about sticks, like moving city funds out of banks that are deemed unresponsive," according to the article.

The letter criticizes the banks for dragging their feet on modifying mortgages and urges them to do "everything possible" to avoid foreclosures. The letter also asks each of the banks to name a high-level official who would handle the appeals of homeowners who have been denied a modification.

The response by the banks was basically, to lie.

According to the New York Times article, in an e-mail sent by Citigroup, spokesman Mark Rogers said, "In the first quarter of 2010, our various modification and extension programs helped many families stay in their homes in New York State ... from Jan. 1, 2007, through March 31, 2010, Citi has helped more than 900,000 homeowners avoid potential foreclosure."

The HAMP performance report for May on Treasury's website, www.financialstability.gov , however shows Citi as having actually modified 34,675 mortgages nationally since the inception of HAMP in 2009. That's an exaggerating of over 860,000.

The same report shows Bank of America as having modified 62,969 loans. Yet in a separate-mail Richard Simon of Bank of America claims they've modified 650,000 loans.

In his letter to the banks Liu claims that 265,000 mortgages in New York State are in danger of foreclosure -that's 13 percent of all mortgages (about 2 million) in the entire state of New York.

So according to the two guys from Citi and Bank of America their banks have single handedly helped 1.5 million homeowners -nearly everyone in New York who bought a home.

One of the unions involved in Liu's campaign is the United Federation of Teachers. Lisa Bielawski, a teacher and school administrator from New York and one of hundreds of homeowners who have recounted their story on www.shamethebanks.org, has seen her monthly payments reduced by a measly $67, her principal increased by $21,000, and was told she had a past due amount of $39,000 despite having never missed a payment.  If this is considered a modification it's a profitable business for the banks.

Lying isn't new to these guys, nor should it be a surprise. Ocwen National Bank, who services over 600,000 loans nationally, mine included, has been making stuff up to Congress and the media for years.

In October 2009 Ocwen patted themselves on the back for singlehandedly modifying 45 percent of all the delinquent mortgages in the country. Their total to date is 13,384. There have been 340,000 nationwide in two years.

Earlier this year Ocwen's General Council Paul A. Koches was quoted in the New York Times as saying "We realized early on that if we don't include principal treatment, you just don't get the buy-in from the borrower to stay with it," referring to principal reductions.

Koches was also notably quoted as saying, "We roll up our sleeves; we talk directly with the borrower. We find out what their situation is and we provide counseling and basically a complete underwriting of the delinquent loan, perhaps the way it should have been done at the point of origination."

But in speaking with Jennifer Levy, an Ocwen Bank Loan Workout Specialist and Ocwen CEO Ronald Farris' own secretary, Linda Ludwig, about my own loan, both women stated emphatically that Ocwen never reduces principal, despite what their executives are quoted as saying. Ludwig even accused us of taking what they said out of context.

Considering the amount of fraud and blatant violations that were found on my original loan by Steve Dibert at MFI-Miami, it's hard to believe they're re-writing loans at all. In fact they tend to re-write them in the form of modifications that leave homeowners in more precarious financial straits then they were to begin with.

In addition, a former Ocwen employee and contributor to shamethebanks.org has made it clear that, "the powers that be at Ocwen will lie and tell Congress whatever they want to hear so that they can continue to rip people and investors off." Adding, "they figure nothing is illegal until a judge says it is."

In my case I've seen my principal increased by $13,000. Ocwen claimed an additional $12,000 to the IRS as a "charge off" (we'll owe taxes on that) and reported the value of our home to the IRS as $100,000 more than their own appraised value.  An appraisal they ordered and made us pay for. In addition they tacked on some late fees, a half dozen certified mail fees, a $315 title report fee, four property inspection fees, a Loan Document Copy Fee, and threw in another appraisal. No one came to the house, no appraisal was done, we received no certified letters, and requested no copies.

These are nothing more than tactics to keep homeowners underwater, in debt, and frightened. The modification process has been abysmal. Without more state officials like Mr. Liu stepping up for the people in their state millions of families in this country will continue to lose their homes.

Without oversight and regulation of the modification process the banks and servicers will make sure that this will not happen until entire savings and retirements are wiped out by continuing to fabricate numbers and offer homeowners false promises in the form of trial payments for the ever elusive permanent modification.

A complaint filed against Bank of America in Arizona says, "Rather than allocating adequate resources and working diligently to reduce the number of loans in danger of default by establishing permanent modifications, Bank of America has serially strung out, delayed, and otherwise hindered the modification processes that it contractually undertook to facilitate when it accepted billions of dollars from the United States."  A similar one was filed in Seattle.

More than 1 million American households are likely to lose their homes to foreclosure this year, as lenders work their way through a huge backlog. Nearly 528,000 families lost their homes in the first six months of the year. If foreclosures continue at that rate, the yearly number would eclipse the more than 900,000 homes repossessed in 2009, according to RealtyTrac Inc., a foreclosure listing service.

Part of the deal when taxpayers forked over nearly a trillion dollars to bail out the banks for their own stupidity and recklessness was that they would make things right. Instead, they've been allowed to continue to pillage with impunity. I'm hoping Mr. Liu will be successful in holding their feet to the fire and be an example for other states to follow.

This article is cross posted in HuffPost

According to a recent article in HuffPo by Shahien Nasiripour, "Treasury claims that Fannie Mae, which administers its Home Affordable Modification Program, screwed up. As a consequence, the public can no longer tell whether homeowners with HAMP modifications ... are being placed in sustainable mortgages."

According to the article, Treasury, relying on reports from Fannie Mae, miscalculated the default rates of HAMP participants by about 600%.

Treasury spokesman Mark Paustenbach said, "In an effort to review and better explain the methodology, we learned from our program administrator, Fannie Mae, that not all canceled loans were included in the underlying information provided to Treasury. The error caused inconsistent reporting of permanent modifications during the snapshots reported. These omissions have impacted our previous analysis... with respect to the performance of HAMP permanent modifications."

Ironically, the week before, in a conference call with reporters,  Herbert M. Allison Jr.,  Treasury's assistant secretary for financial stability, went so far as to praise the default rate as "very low."

Of course, Allison thought the default rate was six percent, when in fact it's been more 60 percent according to Barclay's analyst and as high as 75 percent according to analysts at Fitch Ratings.

Part of the reason for the discrepancy was that Fannie Mae was conveniently not counting homeowners who had been kicked out of the program. That number has been higher than the number of people accepted into the program over the last couple of months. Nearly 94,000 homeowners were bounced from HAMP in June. Compare that to the 66,000 homeowners who were granted some kind of relief. It's the third straight month in which more homeowners were kicked out of the program than have been entered into some phase of it.

In the meantime, while essentially masking the failure of HAMP by providing phony and faulty information to Treasury, Fannie Mae's Terence Edwards, Executive Vice President for Credit Portfolio Management is threatening to punish homeowners who default on their loans.

This comes as no big surprise to homeowners in the way it apparently surprises Geithner and the rest of Treasury. We've known the plan was a farce since the beginning. Loan Servicers like Ocwen, Aurora, Litton, and Saxon, to name a few, have used the HAMP program to bilk close to $4 Billion out of homeowners with false hope and promises. In fact numerous sites and organizations have been pointing out the programs failures since its inception.

While I was in D.C. in April at Treasury, Diana Farrell, Deputy Director of the National Economic Council briefly mentioned the administration's "successful" programs, referring to HAMP, Making Home Affordable, and similar programs designed to address the mortgage fiasco.

I asked her why the administration continues to see these programs as a success when the only point of reference they use to gauge the performance is the bank's own reporting of their progress. She then directed me to the progress reports on financialstability.gov - the same reports Treasury is now reporting as flawed.

Those reports are crap; I've seen them," I said in response, "Why aren't you talking to the homeowners and people whose loans have been supposedly modified. Why isn't there any oversight or verification?"

I didn't get a direct response. Instead she looked to her colleagues in the back of the room and said, "We'll take that under advisement," and moved to the next question in the room.

So while Treasury was taking the word of criminals in the banking and servicing industry - allowing them to report on their own progress, the very organization that caused the meltdown by gobbling up all the toxic mortgages it could is providing status reports that essentially cover up the program's utter failure.

There are some painfully obvious reasons why these modifications are re-defaulting:  A large number of the modifications don't offer any real relief at all. Many homeowners have found themselves owing more principal on the loan than they did before. Others have been offered lower payments amounting to no more than $60 in savings per month - hardly an incentive to stay in a home that's lost 30-40 percent of its value and is more than likely to lose another 30 percent in the coming two years.

It's not like the information isn't out there. There are thousands of stories written by homeowners on shamethebanks.org, givemebackmycredit.com, and MFI-Miami that recount the way homeowners have been abused, lied to, and scammed by the banks and servicers in the name of loan modifications. One story on MFI-Miami about a cancer victim, Lynne, in Northern Michigan has received the run around from Bank of America for over a year while attempting to get her underwater home modified. Through the efforts of Steve Dibert with MFI-Miami, two weeks ago, Bank of America finally offered to modify the loan. This week they changed their mind and have decided to foreclose after all.

Dibert also has an interesting article discussing Bank of America's possible insolvency . Another issue they may be hiding from the public and could explain why, rather than modifying loans, they've decided to simply suck as much money out of homeowners in any way that they can.

Another issue falling through the regulatory cracks and far from any kind of oversight are the "in-house" modifications. As Mark Rodgers, Director, Citi Public Affairs, was kind enough to point out in a comment on a previous post, "the majority of our customers were assisted through a variety of Citi's proprietary programs. HAMP mods are only a small subset of Citi's foreclosure prevention efforts."  Rodgers also claimed that Citi has provided assistance to 900,000 distressed homeowners and directed us to read Citi's own "most recent comprehensive and transparent quarterly report."

Ironically, less than two weeks later, Citi ended up shelling out $75 million to the SEC because they lied to investors about the extent of the bank's holdings tied to high-risk mortgages. So much for transparency.

Unfortunately this is the case with many servicers, and Rodgers received a few comments pointing out the flaws in his claims from other readers.

When servicers create their own modification programs they write their own rules and don't have to bother with the pesky guidelines.  In the case of my mod for example, Ocwen Financial Corp. increased the original principal by $15,000 (basically starting from scratch with a generous tip), they charged off $12,000 to the IRS (I have yet to be told why), and the paperwork and accounting practices are so convoluted that it would take a team of legal experts and CPAs to decipher it.

Congress seems more concerned with denying the unemployed their benefits, gutting the reform bill, stopping anything from progressing, and giving tax breaks to the wealthy.

For his part, President Obama seems to have forgotten all about his speech in Arizona back in February in which he proposed relief for 6 million homeowners over two years.  The HAMP program has done little more than give people the small sliver of temporary hope that may have kept them from walking away from a money pit months ago.

Homeowners have desperately written, emailed, called, and pleaded with their elected officials. We've been to Washington; we've tried to make them listen. For what? To have another announcement come from Treasury that all of the reports we've been following for the last 18 months have been wrong because they simply didn't check their sources? Now what? Is it too early for pitchforks and torches?

John March, one of many homeowners who posted his story to shamethebanks.org, started a Facebook page today called White House Homeowners sit in! 9/11 2010. In the page description he writes, "This is intended to create a group of homeowners and individuals willing to go to Washington and stage a sit in outside the White house in protest. We would stay there until we got answers to questions that have something to do with reality..."

My question is: are there still people in this country willing to fight or have the banks and corporations really beaten us down enough to claim victory?