Facing the onslaught of a foreclosure wave that never seems to relent, President Obama’s administration plans to increase pressure on mortgage companies to do more to assist people in trouble and help them keep their homes.  This according to administration officials.

On Monday, the administration plans to announce details of its expanded program, notes Treasury spokeswoman Meg Reilly.  "We are taking additional steps to enhance servicer transparency and accountability," Reilly asserts. Moreover, she hinted that the objective is to increase the rate that troubled home loans are being converted into new loans with lower monthly payments.  Evidently, Reilly believes this will help stem the tide.

The new effort appears to include increased pressure on mortgage companies to accelerate loan modifications.  To do so, the administration plans to highlight firms that are dragging their feet.  If humiliation doesn’t do the trick, the Treasury is plans to wait until the loan modifications are permanent before paying cash incentives to mortgage companies that lower loan payments.  So, the mortgage companies have a couple of options: get called out, or collect incentives.  Some might just prefer to get humiliated, rather than take incentives in exchange for taking huge risks with borrowers.

Under the $75 billion Treasury program, companies that agree to lower payments for troubled borrowers collect $1,000 initially from the government for each loan, followed by $1,000 annually for up to three years.  So, that’s $4,000 in incentives.  Absolutely insignificant, if downright insulting.  Relative to the risk, $4,000 is ridiculous.

The government support is being funded through the $700 billion financial bailout program.  It is designed to provide cash incentives for mortgage providers to accept smaller mortgage payments, in lieu of foreclosing.  We’ll see how that goes.