In Florida, the epicenter of the national mortgage crisis, government efforts to rescue the housing market have been a huge disappointment.
As of January, only 21,111 borrowers in the state had been able to take advantage of the Obama administration's main lifeline for struggling homeowners, the Home Affordable Modification Program, even though nearly half of all home loans are "underwater" -- the borrower owes more than the home is worth. In Miami-Dade, Broward and Palm Beach counties, only 7,532 were helped.
The national picture is equally dismal. Only 117,000 borrowers had received permanent loan modifications out of 1.7 million deemed to be eligible. Clearly, the program isn't working as intended.
The bad quality of the original loans accounts for many of the foreclosures and other symptoms of a market in crisis. Too many bad mortgages were signed during the boom years by lenders and middlemen who made huge amounts of money by taking a piece of the action and off-loading the risk to unwary investors.
Government programs won't help those who never should have received so-called "ninja" loans -- no income, no job. But there are plenty of homeowners who through little fault of their own have seen their properties fall into an economic sinkhole because home prices have fallen drastically or they lost their jobs and their savings due to the financial meltdown.
To read the complete editorial, visit www.miamiherald.com.
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