Washington finally joins the foreclosure crisis Read more

Congressional Oversight Panel admits HAMP is too slow Treasury heaps some of the blame on itself Not everybody will be helped by HAMP Even Washington is affected When will things improve?

The Federal Governments fight against foreclosures is hardly making a dent on the plight of millions of Americans who are sinking under water, according to the Congressional Oversight Panel tasked with monitoring progress with bail-out efforts.

Their report, issued on Wednesday, confirms long held opinion that, at best, only one million foreclosures will be prevented this is hardly likely to please the millions of other troubled borrowers who do not end up being part of this small fraction.

According to a report issued by the Treasury Department on the same day, the number of Americans who have obtained permanent mortgage modifications has now crept up to 230,000. This is an improvement, but how much longer can the rest hang on?

The Treasury report added that, of the many more borrowers who entered the system, 150,000 have disqualified themselves by missing out on payments or have been bounced by the banks. Even more are still in limbo, and eviction is a constant threat.

Elizabeth Warren, who heads the Congressional Oversight Panel, puts some of the blame on Treasurys tardy response to the emerging crisis.

"The tragedy is that their program simply will not reach the overwhelming majority of troubled households in time," she lamented. Treasury officials have responded by claiming that their program was never intended to help everybody in the first place. "Its still going to be a very painful process for the rest," said Treasury Secretary Timothy Gainer. "We just need to work harder to catch as many as possible in the net."

Last month Obama announced new tweaks to HAMP that encouraged lenders to forgive underwater capital that this is necessary is evidenced by the fact that, of those borrowers helped so far, 75% were already sinking.

Washington and surrounds is following the foreclosure trend itself, and has created its own Capital Area Foreclosure Network to help combine outreach efforts to troubled borrowers. The new network will include the Metropolitan Washington Council of Governments and the Non-Profit Roundtable of Greater Washington, as well as Fannie Mae and Freddie Mac. The four parties aim to share information among non-profit groups and banks while also encouraging a combined regional response to the problem.

An impending report from the Urban Institute will state that, while nearly 3% of Washington mortgages were delinquent and had entered the foreclosure process by the end of 2009, there are signs that the situation may be already turning.

"The region still faces a sizeable challenge," says Peter Tatian of the Urban Institute, "and there are still a large number of trouble households behind with their payments.

The situation clearly needs a steady hand on the tiller. Why dont you stay with us and keep an eye on the action at www.foreclosureconnections.com?