Warren Report Finds Administration’s Foreclosure Mitigation Efforts Still Lagging Behind

The Congressional Oversight Panel, headed by Elizabeth Warren released its report regarding the state of the foreclosure crisis and the Administration’s efforts to address it yesterday. The report concluded that while the Treasury had made significant efforts to improve foreclosure mitigation programs like HAMP, its efforts are still not keeping pace with the scope of the crisis.

It found that 2.8 million homeowners received foreclosure notices in 2009 alone and one in four mortgages are underwater, meaning the home’s value is less than the mortgage. As for modifications, there have been 168,708 permanent modifications completed as of February 2010. What this comes out to is that for every family who received a permanent modification, ten families lost their homes.

The panel commends Treasury for the improvements to the program done to date, including addressing foreclosures due to unemployment and the negative equity (underwater mortgages) situation. At the same time it urges Treasury to act more quickly, since it is clear that current efforts are coming too late to help the majority of distressed homeowners.

The panel also expressed concerns that by continuing to offer the servicers and lenders more incentives in bits and pieces, that Treasury may be encouraging them to delay modifications in the hopes that larger incentives will be available later.

So, basically, Warren and the COP have found that the Administration’s efforts to stem the foreclosure crisis have been too little and too late given the magnitude of the crisis. To underscore that, let me leave you with one more number out of that report: currently, there are 6 million homeowners who are 60 days or more delinquent on their mortgages.

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