On an emotional level, many Americans have never come to terms with the $700 billion bank bailout that passed in the waning days of the Bush administration. Though it garnered bipartisan support, and the overwhelming view of economists and businesses leaders was that it averted calamity, the idea of propping the very institutions that caused the crisis seemed like a bad use of taxpayer money. How could it be otherwise? So in response, President Obama decided early in his administration to take $50 billion from the bailout funds and redirect it to homeowners. The goal was to induce banks to modify the terms of millions of loans that were in danger of default because of declining home prices. It was always a dubious idea. Bailing out people who, in many cases, bought houses they couldn’t afford isn’t much more appealing than bailing out bankers. And besides, this is bailing out bankers because it’s impossible to help borrowers without helping lenders as well.

Roughly a year after the program was created, and a week after some changes were announced, what is becoming increasingly clear is this: The main part of the bailout is shaping up less as a bailout than a shrewd investment, while the loan modification program looks like an embarrassing failure.

Now that the threat of a second Great Depression is gone, the justification for bailouts of any kind is even more tenuous. And despite improvements, the mortgage program still looks like a sweetheart deal for banks, as well as select homeowners.

http://blogs.usatoday.com/oped/2010/03/debate-on-foreclosures-our-view-get-out-of-the-business-of-mortgage-modifications.html#more