If we've learned nothing else the last year or so it's that we can't count on the folks running our financial system to be, you know, wise.  Check out this paragraph from an article in the Washington Post about the trouble Bank of America is having meeting the Obama administration's November deadline for modifying 125,000 home loans:

The company's effort has been hamstrung by a staff shortage and by adapting its computer systems and even fax machines to the scale of the program, which began in March. The company was also slow out of the box because it initially took a more conservative approach than some other banks, requiring that borrowers document their income and complete other paperwork before granting preliminary approval for a modification. In August, Bank of America softened the requirement and began authorizing some modifications without getting all the documents first. (Emphasis mine)

So a bank is struggling, in part, because it is doing what we'd normally expect a bank to do when it's loaning money to a consumer?  Obviously they're doing this because they don't want to risk any more of their capital than they have to, right?  Maybe not so much:

Under the Making Home Affordable program, lenders are paid with taxpayer funds to reduce borrowers' mortgage payments by lowering their interest rates, for example, or by extending the terms of their loans…

Bank of America and other lenders have a lot riding on the foreclosure prevention program. The company stands to collect about $6 billion — some of which will be passed on to investors — of the $75 billion the administration has set aside for the Making Home Affordable program. 

Hey, it's easy to criticize the banks since they really and truly have earned condemnation on many fronts.  It's also easy to laud a program that's set up to help people manage their mortgage expenses.  It's damn near impossible to understand how this is going to end well.