Soon after taking office last year, Barack Obama announced plans to set up a program to shore up the flagging housing industry. According to Yahoo Finance, the problem was that so many homeowners had lost their jobs or were so far underwater that it didn’t make sense to continue paying their mortgages. So this came as welcome news to those who were in need of some form of mortgage modification or other assistance. A lot of people applied for aid, assuming one and a quarter million homeowners is a lot.

Unfortunately, the government bureaucracy was not up to the task. It turns out that many people have grown so tired of waiting for help that they have dropped out and decided to go it alone. Over 400,000 homeowners have given up on the government; last month, there were more than 150,000 as the rate of disgruntlement has increased.

Although the administration has been slow to respond to requests for help, it had a rapid response team ready to respond to these facts. First, they claimed that the housing market has improved significantly in the last year. This came as a surprise to me, but I’ve been basing my knowledge on the stagnant housing statistics that have been reported each month.

Second, the administration claimed that many of those who dropped out are still able to get help from alternative sources. Well, if that’s true, then why did the federal government have to get involved in the first place and just shatter people’s hopes? Outside analysts predict that most of those who don’t get aid will eventually be foreclosed upon.

Third, the administration cited over 300,000 homeowners who have been granted help. This is about one out of every four applicants in fifteen months. Why such a low percentage, you ask. Well, the administration pressured banks to take applications without regard to the income of the claimant. So when the banks actually got them to turn in their income verification, the individuals were unable to meet the terms of the program. So if the banks had loaned them money, it would have been Countrywide all over again.

Because banks are now getting income verification at the beginning of the process, the number of applications is now one-third what it was a year ago. Consumer advocates had high hopes for the program when it began. Now, they are dissatisfied with the results. In the words of one consumer relief advocate, ‘it’s sad that they didn’t put the same amount of resources into helping families avoid foreclosure as they did helping (investment) banks.’