Mortgage Workouts Not Solution

Part 1: Programs Act as Band-Aids

By Mary Kane 9/8/08 6:00 AM

When the foreclosure crisis began to heat up last fall, troubled borrowers got this advice: Call your lender and try to work things out. The Bush administration led the way on this, unveiling its Hope Now program — a hotline to connect borrowers with mortgage counselors and servicers to re-do loans on easier terms.

President George W. Bush and Treasury Secretary Henry M. Paulson Jr. touted the approach as a private sector-led effort to help homeowners who were falling behind on their payments. Hotlines and efforts like Hope Now sprung up at the state level as well.