As if the U.S. government weren’t hemorrhaging enough money, the Obama administration is reportedly now doling out cash to liars. A Dec. 16 waiver of a requirement in the federally funded Home Affordable Modification Program is allowing borrowers who understate their income by 25 percent or more when trying to get mortgage modifications avoid penalties. The December 16 waiver allows such borrowers to continue a trial period instead of being rejected outright, says an Associated Press report. Before the November’s White House crackdown on big, mean mortgage companies, applicants who were found to have conveniently forgotten how much they made had to restart the application process.
Now, though, the government seems to be rewarding these people—the very group responsible for a large part of the housing market collapse. According to the Dec. 25 AP article: “More than a third, or 4.3 million, of the home loans issued from 2004 through 2007 were for borrowers who provided no or little documentation of their income.”