The federal mortgage modification program was designed to prevent as many as 4 million foreclosures. But it can't keep up with demand, says one report.
>> Sherry Lee: It's not over yet.
>> Anthony Mason: Jeff and Sherry Lee knew they'd have trouble meeting their mortgage payments when his business installing granite counters started slowing last year, but eighteen months later, they're still waiting for a permanent loan modification.
>> Jeff Lee: It was a joke. You just got the shuffle. You got, you know, put from one person to the next. You just couldn't get any answers from anybody.
>> Anthony Mason: The process has taken so long the Lee's are now on foreclosure.
>>
Speaker: That's a huge failure.
>>
Speaker: Attorney Gene Malchionne assumed spelling says he has a dozen clients who need mortgage modifications, but can't get them.
>> Gene Malchionne: The people handling the paperwork don't seem to know from one month to the next what they're doing. It's just chaos.
>>
Speaker: Do you have your loan number available?
>> Anthony Mason: The government's 50-billion dollar program to help homeowners can't keep up with the growing crisis, says a new report by the Congressional oversight panel, with foreclosures now out-pacing modifications by two to one.
>>
Speaker: We're saying that where bailing it out, but the boat's taking on water faster than we can bail.
>> Anthony Mason: Elizabeth Warren says the government's plan was designed only to attack the sub prime problem.
>> Elizabeth Warren: Now, what we have is a crisis that's hit prime mortgages, one that's largely driven by unemployment.
>> Anthony Mason: At this pace, the Federal Housing Administration, which backs more than 20 percent of all new mortgages made need a multi-billion dollar bail out.
>>
Speaker: I think the problem is going to be very intense over the next six to twelve months, particularly as unemployment continues to increase and housing values remained under pressure. Foreclosures are going to be a problem for us well into 2011 and 12.
>> Anthony Mason: The oversight panel urged the Treasury to expand its program. It's estimated another three and a half million homes could go into foreclosure by the end of next year. Katie.
>>
Katie: All right. Anthony Mason. Anthony, thank you.
==== Transcribed by Automatic Sync Technologies ====
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