Saturday, January 30, 2010

Treasury Removes Embarrassing Line From Mortgage Modification Report

Original posted In The Atlantic by Daniel Indiviglio:

I was working on a post about the Treasury's new mortgage modification rules (to soon follow) when I noticed something kind of amusing. Last month, I noted that its mortgage modification program was doing incredibly badly in terms of providing permanent modifications to struggling homeowners who requested assistance. In fact, it had a mere 1% success rate through November. Looking at this month's report, I suddenly realized that I couldn't make that calculation any more: the Treasury removed the denominator of the ratio from the report.

Here's what the chart looked like in November's report (.pdf):

Nov 2009 mort mods treas rpt-thumb-468x321-19378.png

And here's that chart in this month's report (.pdf) for December:

Dec 2009 mort mods treas rpt.PNG

Notice anything? In the new format, the Treasury added a few lines, and dropped the top one from November -- the number of troubled homeowners who actually applied to the program. Now anyone who reads this report can no longer evaluate how successful it was, based on the total number of applicants.

I looked throughout the rest of the report, and I couldn't find this statistic included. On one hand, I can't blame the Treasury. It was really embarrassing. If no one can calculate the program's success rate, then that should eliminate some of the negative news stories plaguing the program, like those with headlines such as "1% Success Rate For Obama Administration Mortgage Modification Program." On the other hand, this isn't the kind of transparency the President promised when criticizing the Bush administration's opaqueness during the campaign.

Update: Naturally, I contacted the Treasury about this, and just got a response. They informed me that the latest number (through December) is 3,297,817. The reason they didn't include it: "there didn't seem to be much interest in that metric and we're trying to make the report as user-friendly as possible." By the way, in case anyone's interested in that calculation I couldn't make -- it's now the case that 3% of the requests for financial information sent to borrowers have resulted in permanent modifications. That's up from 1% in November. So it's improving!

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