NYTIMES: OBAMA MORTGAGE PROGRAM A MISERABLE FAILURE

NYTIMES: "U.S. Loan Effort Is Seen as Adding to Housing Woes"

Since President Obama announced the program in February, it has lowered mortgage payments on a trial basis for hundreds of thousands of people but has largely failed to provide permanent relief. Critics increasingly argue that the program, Making Home Affordable, has raised false hopes among people who simply cannot afford their homes.

As a result, desperate homeowners have sent payments to banks in often-futile efforts to keep their homes, which some see as wasting dollars they could have saved in preparation for moving to cheaper rental residences. Some borrowers have seen their credit tarnished while falsely assuming that loan modifications involved no negative reports to credit agencies.

Some experts argue the program has impeded economic recovery by delaying a wrenching yet cleansing process through which borrowers give up unaffordable homes and banks fully reckon with their disastrous bets on real estate, enabling money to flow more freely through the financial system.

... The Treasury Department publicly maintains that its program is on track. “The program is meeting its intended goal of providing immediate relief to homeowners across the country,” a department spokeswoman, Meg Reilly, wrote in an e-mail message.

But behind the scenes, Treasury officials appear to have concluded that growing numbers of delinquent borrowers simply lack enough income to afford their homes and must be eased out.

THAT'S CORRECT: THE RIGHT THING TO DO IS LET THE MARKET CORRECT ITSELF.

IT WOULD HAVE BEEN EVEN BETTER IF THE FEDERAL GOVERNMENT HAS STAYED COMPLETELY OUT OF THE HOUSING MARKET IN THE FIRST PLACE; (THE HOUSING BUBBLE WAS MOSTLY THE RESULT OF THE FEDERAL GOVERNMENT ORDERING BANKS TO MAKE BAD LOANS VIA THE C.R.A. AND FANNIE MAE).

GOVERNMENT THAT GOVERNS LEAST GOVERNS BEST.

I BETCHYA OBAMA WOULD GIVE THE PROGRAM A SOLID B+.

Update: Scooped Instapundit by a day.

UPDATE #2: SCOOPED HOT AIR BY A DAY, TOO.