The great savior of the Federal Government’s foreclosure bailout plan is struggling to get out of the gate. For a time sensitive project, the inability to get the bureaucracy moving is not surprising, but disappointing.

What will probably be worse is once the mortgage forgiveness plan gets moving though, it will far outlast the housing crisis and distort the marketplace for years to come as foreclosure bailouts will continue far beyond their useful purpose.

So far, two months after the program went into effect, about 55,000 homeowners have been extended loan modification offers, according to a senior administration official. At the same time, foreclosures continue apace. RealtyTrac reported Wednesday that foreclosure filings reached 342,000 last month, up 32 percent from April 2008. Moody’s has estimated that more than 2.1 million homeowners will lose their homes this year.

Because of the size and complexity of the modification program, the administration has only recently assembled most of the pieces. In late April, officials fleshed out their plan to modify or forgive second mortgages — one of the big stumbling blocks in modifying primary mortgages — and provided more details on the Hope for Homeowners program, for borrowers who owe more than their homes are worth. Congress is close to acting on legislation to protect mortgage servicers from potential lawsuits from investors, while also expanding the Federal Housing Administration’s ability to modify loans. via NYTimes.com.

Related posts:

1. Federal Reserve Initiates 9.9 Billion Dollar Loan Modification Plan
2. South Carolina Blocks Foreclosures Until Housing Plan Enacted
3. Treasury Department Calls Meeting With 25 Largest Mortgage Lenders
4. My Landlord is the United States Government?
5. Federal Judge To Mortgage Companies: Show Paperwork or There is No Mortgage