Yet another hopey-changey program languishing under bad management:
As the Obama administration attempts to turn around the beleaguered Hope for Homeowners program to fight foreclosures, it faces a nettlesome new headache. The primary lender involved is under investigation by the Department of Justice.
Senior federal housing officials say that of 51 loans made under the program, 50 were made by Melville, N.Y.-based Lend America, and those 50 loans are being held up pending ongoing federal investigations. The officials, who insisted on anonymity because they are not authorized to speak on the matter, declined to offer specifics except to say anything from inadequate documentation to unethical practices could be the focus of the queries.
The investigations are just the latest problem plaguing the Hope for Homeowners program, which stumbled after an inauspicious start under the Bush White House. It was an attempt to help 400,000 troubled borrowers by getting them into fixed-rate government-insured mortgages. But thanks to overly strict guidelines and weak incentives, the program foundered, producing just 51 closed loans in six months. In April, Obama unveiled an overhauled version as a key part of the $75 billion Making Home Affordable plan.
Bad government. No cookie.