Obama Foreclosure

Never had Debra Town missed making a payment, she says. But when she lost her job as an accountant in December 2008, in the midst of the worst stretch of the worst economic downturn since the Depression, delinquency suddenly became a possibility. She realized she might not be able to make the mortgage payments on her home in the suburbs of Atlanta.

Soon, the airwaves buzzed with promises of relief for people in her situation, courtesy of the Obama administration’s new program aimed at limiting foreclosures. In March 2009, Town called her lender, JPMorgan Chase, and asked for help.

So began a long, tangled and excruciating experience featuring waylaid documents, ceaseless calls from collection agents, and a bewildering stream of contradictory letters from Chase, she says — some congratulating her for securing a loan modification, others threatening to foreclose on her property.

That part makes Town typical. From the beginning, the administration’s anti-foreclosure efforts have been bedeviled by staggering ineptitude from mortgage companies and hollow promises from Treasury to hold the banks to account.

But one fact makes Town’s case both unusual and especially troubling: She amounts to a success story. She is among those who have applied for help under the Obama plan and eventually come out with a so-called permanent loan modification–lowered payments for five years.

The Treasury Department counts more than 520,000 people who have secured permanent loan modifications under its Home Affordable Modification Program, or HAMP. Town is among those who have secured permanently lowered payments from Fannie Mae or Freddie Mac, the government-controlled mortgage companies. Since the fall of 2009, they have collectively delivered about 179,000 permanent loan modifications, according to the the Federal Housing Finance Agency.