In the wake of the administration’s announcement that it will mandate additional changes to it’s Making Home Affordable program aimed at improving its pace and overall effectiveness, it bears asking the question whether the program’s ineffectiveness to date is a result of factors now largely beyond the control of the lenders and servicers charged with the program’s implementation. 

One thing is certain and that is with unemployment now in the double digits and expected to continue to rise into mid-2010, it is prudent to expect that the impacts of ANY loan modification program will be at best modest.  And like it or not, the administration must now come to grips with the reality that perhaps the greatest housing crisis in this nation’s history – though borne of excess, greed and avarice by some within the mortgage industry – the crisis is now largely the result of a generally anemic economy and high unemployment. 

Let’s face it, the monthly payment on a mortgage - even with an interest rate of 0% - is too high when the primary earners in that household are unemployed or seriously underemployed.   

Thus, while efforts to improve the performance of the Making Home Affordable program should continue and Treasury’s efforts in that regard are to be commended,  the administrations’ efforts to stem foreclosures and solve the great housing crisis now must also attack the new root cause of the crisis, namely jobs, jobs, jobs.