Sources tell The New York Times that the federal government is leaning toward more pressure on banks to lower the principal on loans they service and own. Consensus is growing that President Obama’s Making Home Affordable program isn’t really working very well.

“The banks are not doing a good enough job,” Michael S. Barr, Treasury’s assistant secretary for financial institutions, said in an interview Friday. “Some of the firms ought to be embarrassed, and they will be.”

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