The Obama administration has been spending a lot of taxpayer money in an effort to stave off a financial and political collapse with very little to show for their largesse.

The latest example of the White House’s failure to grasp the real problem with the economy comes from the $50 billion being expended to help individuals obtain mortgage relief under the Home Affordable Modification Program (HAMP).

To date a whopping 650,000 people have been placed in trial modifications though only 2,000 have been made permanent.

The Obama administration decided this week that this was a far cry from what they had expected and issued a warning to mortgage companies that they need to get on the bandwagon to make more of the trials permanent or else.

That’s all well and fine if you believe as the administration does that the slow pace of permanent re-fi’s is the fault of the mortgage companies alone and that it’s okay for the government to bully private firms into submission.

But upon closer inspection it turns out that the mortgage firms have tried to help homeowners but many of those that had applied failed to meet the terms of the program.  Banks report that in some areas they have received less than 20% of the necessary paperwork required for a modified loan and even when payments are reduced many borrowers failed to make even one of the three required reduced payments to qualify for a permanent reduction.

There is plenty of blame to go around, mortgage companies who are reluctant to act if a borrower is current on their loan, onerous government paperwork and homeowners who overpaid for their homes and think that they deserve a bailout and that the government won’t make them homeless.

Yet the real problem is that many of the troubled homeowners lost their jobs and have been living off of unemployment benefits or the generosity of family and friends hoping that the economy would turn around. They can’t pay a mortgage if they don’t have any income.

The president held a jobs summit with some business leaders and liberal economists yesterday to explore ways to create jobs and get the economy back on track.  But the White House excluded both the Chamber of Commerce and the National Federation of Independent Business two groups that know quite a bit about job creation and growth because they aren’t political allies of the president.

In the end the president came away with some feel good talking points and left the impression that he was concerned and wanted to solve the worst unemployment crisis in over a quarter century though by excluding some very important voices he did just the opposite.

As a result of this half-hearted effort taxpayers will have wasted another $50 billion as foreclosures will continue to march on.

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