Friday, August 20, 2010

The Supply of Bureaucratic Nightmares

The AP reports today

"Many borrowers have complained that [Obama's mortgage modification] program is a bureaucratic nightmare. They say banks often lose their documents and then claim borrowers did not send back the necessary paperwork."

I am not surprised because, as I wrote earlier this year, "lenders have an incentive to foreclose on borrowers deemed modification eligible by the federal programs." Rather that overtly contradicting the U.S. Treasury by denying eligible borrowers, banks are just encouraging borrowers to deny themselves.

1 comment:

TGGP said...

Your blog header is "Supply and demand (in that order)". You've done a good number of posts on supply. Anything to say about demand?