This system must come down
Mortgage companies enrolled in the Obama administration’s signature foreclosure-prevention initiative may be receiving taxpayer funds despite not having a legal right to the home or to the mortgage, a top Treasury Department official revealed Wednesday.
But despite faulty or missing paperwork, the Obama administration allows mortgage companies to boot homeowners from the program, sticking the borrowers with massive bills that often leave them worse off.
During an oversight hearing, Phyllis Caldwell, Treasury’s housing rescue chief, acknowledged during questioning that Treasury doesn’t know whether mortgage companies and the owners of mortgages are receiving public money under “false pretenses.” Treasury is investigating, she said.
The contradiction highlights what many critics of the past two administrations’ policies have claimed for some time: they exert overwhelming force when it comes to saving financial institutions, but merely modest assistance when it comes to distressed homeowners.