Is Fannie Mae Sabotaging Obama's Housing Rescue? | Mother Jones

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Is Fannie Mae Sabotaging Obama's Housing Rescue? Mother Jones: "In HAMP, you see, the homeowner first goes through a multiple-month trial run with lower payments. If the homeowner stays current during the trial run, the modification should theoretically be converted into a permanent modification, with the lower terms applying for three to five years. A three- or four-month trial mod doesn't do a homeowner much good—but those trial runs did put money in Fannie's pocket. As CPI's Hudson reports,
Herron charges that Fannie Mae continued in headlong pursuit of “trial mods” even though it knew many had little chance of becoming permanent. As late as September 2009, barely 1 percent of trial modifications had converted to permanent modifications by the end of their three-month trial, a Congressional oversight panel found. Nevertheless, Fannie preferred doing trials, Herron alleges, because it was eligible to receive incentive payments from the Treasury Department for trial modifications it booked before the end of 2009."