The US administration pulled a fast one on their citizens in November in an effort meant to conceal their acceptance of the failed “Making Home Affordable” program.

The stimulus measure introduced in February was marketed as a way to help homeowners having difficulty paying mortgages stave off foreclosure by providing to lending institutions funds and incentives to modify existing loan terms.

However, in the past eleven months, many of the banks and lending facilities have skirted the issue and foreclosures are still a significant problem in the US. Now, many who visit these pages regularly know that I am and have been against the program.

To me, the idea of helping those caught up in loans that they cannot possibly repay, and could not afford when they got it is only postponing the inevitable.

Markets rise and fall, this is the capitalist way, and if those who are greedy or not careful end up suffering as a result of overreaching, then so be it.

This is not a cruel and heartless thought; the borrowers were wrong for biting off more than they could chew and the lenders were wrong for approving mortgages that exceeded the actual value of the property. A foreclosure hurts them both.

Anyway, while the US administration had been defending the program since its inception, scores of problems have come up; banks taking the government funds hold to the letter of the law and end up foreclosing still on the homeowner using loopholes – thus lowering their loss.

Homeowners who believed that by accepting a loan modification, their credit rating would not affected have seen their ratings fall and as a result, their premiums on every other loan go up – thus making life now more expensive than it was before they modified the loan. And this all happened within the legal framework of the program.

And so, in November, with little publicity (I found this by chance as a side mention to something else) – the US implemented a new program called the Foreclosure Alternatives Program, which in effect helps ease the pain of those being foreclosed on.

The program is slated to compensate the banks that hold bad mortgages for allowing the homeowners to sell for less than the mortgage value, while essentially leaving the credit rating untouched.

 The program will also incentivize lenders who encourage deed swaps instead of opting for foreclosure – where the homeowner effectively becomes a renter and is allowed to stay in the house while the bank moves into the role of landlord.

The clandestine program demonstrates the Obama administration’s refusal to acknowledge failed policy.

No one was expecting the “second-coming” to solve all the woes of the country at once – and do so flawlessly – when he was inaugurated one year ago. What people did want, what they had fought for, was government accountability.

I am not passing judgment on the new program, I do not know enough about it yet to do so. What I am criticizing is the manner in which it was done – without an “oops, we were wrong” or “well, our first try at solving the mortgage crisis failed and so….”

The Administration came into office screaming about transparency; the midnight votes in Congress involving the economic future of our offspring, the hiring of dozens of “Czars” or advisors that do not need traditional vetting or scrutiny as other appointees and new controversial programs that cover up past failures to not lend themselves to be see-through, in the open.

Each failure brings you closer to success – there is no shame in admitting when you have had one.