Foreclosure relief programs conditioned on current payments fail the borrowers who need them most

Evidence

But when Chris lost her job in 2009 she struggled to keep making the payments. The house was underwater. She had already paid 240,000 on a home now valued at 40,000. Her mortgage changed hands at least three times in six months. Chris tried everything to prevent foreclosure, but the latest holder of her loan—Investors One Corporation—decided to evict her. President Obama had created a plan to help distressed borrowers, but Chris couldn’t take advantage of it; the program required that homeowners be current on their mortgage, and she was not. “But if you’re current on your mortgage, you don’t need modification,” Chris said. The game seemed rigged to protect the mortgage lenders. — Eddie S. Glaude Jr., Democracy in Black, 31

Categorization

• DEFINE: Concretely illustrates the circular catch-22 in foreclosure-modification policy.
• QUESTION: Contrast with the later discussion of Obama’s broader politics — who chose this program design and why?