Bitter Laugh: Homeowners Foreclose Bank

From the gloom of news, a man-bites-dog story brings comic relief to a national tragedy.

In Florida, a couple wrongfully targeted by Bank of America proves in court they have no mortgage, is awarded legal fees and eventually allowed to foreclose the branch when the bank fails to pay. Sheriff’s deputies, movers and the couple’s attorney go there with permission to remove desks, computers, copiers, filing cabinets and cash in the teller’s drawers before the bank finally antes up what it owes.

Nationwide, however, homeowners are suffering as an Obama program started two years ago to modify mortgages for three to four million families reports that it has helped only 670,000 so far. The Treasury Department with $46 billion to spend on keeping homeowners in their houses so far has spent only about $1.85 billion.

A former Federal Reserve economist estimates as many as a million homeowners were foreclosed as a result of insufficient help for the unemployed. “The money was there and they didn’t spend it,” says a critic.

Administration officials defend themselves by pointing out that their programs are voluntary, limiting how hard they can push mortgage providers and investors, who often profit more from foreclosures than extending aid.

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