“The huge number of loans that needed to be reworked, combined with burdensome documentation requirements and a lackluster effort on the part of banks’ mortgage servicing divisions, guaranteed the program was “doomed to failure,” according to Bair.
“What’s more, it cheated borrowers,” she wrote. “Because Treasury wanted to demonstrate quickly that huge numbers of borrowers were being modified, it let borrowers enter into ‘trial modifications’ whereby they would start making reduced payments pending completion of all of their paperwork. But many of the borrowers could not provide all of the extensive documentation required by the program, so they would be put into foreclosure even though they had been making timely payments for months!”
Bair’s book describes Obama as engaged and knowledgable about housing recovery efforts, but undermined by his aides, particularly Treasury Secretary Tim Geither and former economic adviser Larry Summers.”Twitter