Watching the bipartisan Congressional Oversight Panel grill Phyllis Caldwell, head of the Treasury Department’s home ownership preservation office, at this week’s hearing was fairly disheartening.

Panel members asked tough questions, and appear to have done the math. Caldwell stuck to her prepared script which amounted to little more than the following two statements: Mortgage servicers behavior has been “unacceptable” during the housing crisis and the foreclosure crisis doesn’t appear to be a “systemic” risk to the financial industry.

Even when panel members pushed Caldwell to acknowledge that if Bank of America (for example) had to take back even a fraction of its bad loans and repay investors, the cost would be more than the bank’s total capitalization, Caldwell stuck to her script. No, there doesn’t appear to be a “systemic” risk.

It’s hard to understand what game the Obama Administration is playing. Of perhaps 7 million homeowners who are in foreclosure, or are seriously delinquent on their mortgages, fewer than 500,000 have received permanent loan modifications. I receive emails every day from homeowners who have run up against a brick wall and are being asked for the umpteenth time to resend all of their documents.

Other prospective loan modification recipients are rejected and are never even told they have failed to get a loan modification and only hear about their rejection from creditors calling to collect amounts that the bank now claim are due on their loan.

Yesterday, I received an email from a homeowner telling me that she was finally offered a permanent loan modification – at a higher monthly payment than what she was already making.

“If I could have afforded my original payment, I would have never needed to file for a loan modification,” she wrote. “But I couldn’t afford it and I can’t afford to pay more than I was paying before.”

The loan modification process has been anything but transparent. To the contrary, President Obama made big promises that up to 4 million homeowners would be helped. Instead, only a tiny percentage of families have had their loans modified. The rest have had their credit destroyed, have lost or will lose their homes, and still do not understand that the entire program was voluntary (even for lenders who “committed” to joining the HAMP program) and the deck was stacked against them from the beginning.

To say that there is no “systemic” risk to the financial industry when possibly $1 trillion in loans could go bad, sounds like someone is hoping that if you just stay positive and talk about the future, eventually it will get here and everything will be better.

But will it? I’m not so sure. Fannie Mae and Freddie Mac, which are in conservatorship, will require about $350 billion (or more) to cover bad loans. That’s on the U.S. taxpayer. Meanwhile, home values are still falling in many areas and property taxes are rising because so many homeowners have stopped paying their taxes.

For homes that have been abandoned by homeowners, banks aren’t necessarily stepping up to pay those taxes, nor are they really taking care of those properties in a way that will improve the value of the property or the surrounding neighborhoods.

In his recent appearance on the Jon Stewart Show, the President said that while he promised change during his presidential campaign, he didn’t promise change in 18 months.

Well, that’s too bad for millions of homeowners who have lost their homes, jobs, and financial lives in the last 18 months – and for the millions more who are destined to walk that mile.

The Making Home Affordable loan modification program seems to have been a complete failure. Meanwhile, Main Street is about to be foreclosed upon.