Tuesday, October 04, 2011


The Obama administration had total control of this.
Documents obtained by ProPublica – government audit reports of GMAC, the country’s fifth largest mortgage servicer – provide the first detailed look at the program’s oversight. They show that the company operated with almost no oversight for the program’s first eight months. When auditors did finally conduct a major review more than a year into the program, they found that GMAC had seriously mishandled many loan modifications – miscalculating homeowner income in more than 80% of audited cases, for example. Yet GMAC suffered no penalty. GMAC itself said it hasn’t reversed a single foreclosure as a result of a government audit.

Even aside from bleeding heart concerns about desperate homeowners, or even quaint concerns about due process and similar, many of us have been trying to tell them that without doing something about the now-messed up housing market, the economy would not recover. And by messed up I don't mean "lack of perpetually rising prices," I mean misaligned incentives between originators, servicers, and investors which would ensure a giant clusterfuck.