Government Will Attempt To Shame The Shameless Into Increasing Permanent Loan Modifications

The New York Times reports:

• The Obama administration to[day] plans to announce a campaign to pressure mortgage companies to reduce payments for many more troubled homeowners, as evidence mounts that a $75 billion taxpayer-financed effort aimed at stemming foreclosures is foundering. "The banks are not doing a good enough job,’’ Michael S. Barr, Treasury’s assistant secretary for financial institutions, said in an interview. “Some of the firms ought to be embarrassed, and they will be.’’

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• Barr said the government would try to use shame as a corrective, publicly naming those institutions that move too slowly to permanently lower mortgage payments. The Treasury Department also will wait until reductions are permanent before paying cash incentives that it promised to mortgage companies that lower loan payments. “They’re not getting a penny from the federal government until they move forward,’’ Barr said.

For more, see US to prod mortgage firms on lowering loan payments (Treasury will link reductions to incentives).