that more than a third of the 1.24 million borrowers who have enrolled in the $75 billion mortgage modification program have dropped out?  That exceeds the number of people who have managed to have their loan payments reduced to help them keep their homes. In May alone,155,000 borrowers left the program -- bringing the total to 436,000 who have dropped out since it began in 2009

One reason why so many have fallen out of the program is because the Obama administration initially pressured banks to sign up borrowers without insisting first on proof of income. When banks went to collect the information, many troubled homeowners were disqualified or dropped out.  Treasury officials now require banks to collect two recent pay stubs at the start of the process and, borrowers have to give the IRS permission to provide their most recent tax returns to lenders, what a concept! 

As more homeowners drop out of the program, a wave of foreclosures could occur. If that happens, it could weaken the housing market and hold back the broader economic recovery.  The mortgage modification plan was announced with such fanfare just after Obama took office, I myself was a bit skeptic and now find myself completely disappointed!