Lawmakers Frustrated With Foreclosure Aid Programs

Lawmakers vented Thursday about the government's inability to solve the nation's housing woes as fresh data showed foreclosure filings continued to rise.

Lawmakers made clear at a Senate banking committee hearing today that they aren't satisfied with efforts to fix the mortgage crisis.

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Sen. Christopher Dodd., D-Conn., chairman of the Senate Banking Committee, called the overall lack of progress by the government "disgraceful." He noted that borrowers are facing long delays as they try to get help.

"We're being asked everyday by our constituents and others: What's going on?" Dodd said at a committee hearing.

In March, the Obama administration launched a $50 billion plan to give the lending industry financial incentives to modify mortgages to lower payments for struggling borrowers. As of mid-July, about 160,000 borrowers were enrolled in three-month trial modifications under the plan. Officials say that number is growing.

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Herbert Allison, the Treasury Department's assistant secretary for financial stability, said the administration is prodding mortgage companies to add more staff and beef up training.

Though modifications are on the rise, Allison said, "We're not satisfied."

Last week, top officials summoned executives from the 27 participating mortgage companies to a July 28 meeting to discuss their results. And next month, the government plans to publish a detailed breakdown of how well each company is performing under the program.

"They have a strong incentive to modify as many eligible loans as possible," Allison said.

But lawmakers aren't satisfied, especially given the billions of dollars the government has handed out to bail out troubled banks.

"When are you going to stop the bleeding?" Sen. Jim Bunning, R-Ky., asked repeatedly.

Allison responded: "We are moving as fast as we can to get out in front of the problem."

Banking industry executives defended their track records, saying the program is complex and hundreds of employees had to be hired and trained.