The government's foreclosure prevention plan is premised on the idea that the best way to prevent foreclosures is to work with mortgage servicers. The government offers a range of incentives to induce servicers to make loans affordable for struggling homeowners. Since subprime borrowers represent an outsized portion of those struggling to keep up on their mortgage payments, the program necessarily involves paying companies that specialized in subprime mortgages to fix a problem they helped create.

In a new report, the Center for Public Integrity found that "of the 25 top participants in the program, at least 21 were heavily involved in the subprime lending industry," most through specializing in servicing subprime loans, but several both serviced and originated the loans. By far the largest is scandal-ridden Countrywide, now a part of Bank of America. More than 10 percent of the $50 billion of TARP funds earmarked for the foreclosure program has been set aside for Countrywide. The money will be used to pay Countrywide for modifying loans, but will also go to investors in the loans and Countrywide borrowers who keep current after modification. Despite these carrots, a recent Treasury Department report showed Bank of America lagging behind the other major lenders in its pace of modifying loans.

The Center for Public Integrity's report is a follow-up to an earlier one that identified the top 25 subprime lenders from 2005-2007 and their financial backers, many of which were financial firms that received TARP funds through other programs.