While the lackluster results of the government's HAMP foreclosure prevention program is well-documented at this point, there are a variety of competing theories for why it's been such a disappointment. Were the incentives too weak? Were banks unwilling to work with borrowers? Or maybe the program itself was poorly designed? Kate Berry at the American Banker provides another potentially strong reason: the process for complaining about being denied a mortgage modification is run by a subprime mortgage lender spin-off:

The nonprofit Homeownership Preservation Foundation got its start as an in-house arm of the mortgage lender Residential Capital LLC, a unit of Ally Financial Inc., the former GMAC Inc. The foundation's board is dominated by GMAC and other finance officials; its chairman is the former CEO of GMAC's ResCap unit.

No one involved even bothers to dispute the conflict of interest, one of many that have plagued the Treasury Department's Home Affordable Modification Program, or Hamp.

Read the full story at American Banker.