The New York Times descends into customer-service hell on A1 today, reporting on the effort to modify mortgages under the Obama foreclosure plan.

Reporter Peter S. Goodman spent two days listening in on calls at a mortgage-modification company to come back with this dispatch, which illustrates well why the foreclosure-prevention plan hasn’t done a whole lot in the few months it’s been in existence.

The anecdotes are painful to read. Banks repeatedly lose customers’ files (three times in one case) and force the whole process to start over again.

“I don’t know what happened,” says a customer service officer who identifies himself as Chris. “I don’t know if there was a glitch in the system, whether it was transferred from one call center to the other.”

Think of the documents as being part of a pile massing inside the bank, Chris suggests. “This pile is not going to be moved forward at any point in time.”

Meanwhile, homeowners fall further and further behind.

The Obama plan wasn’t ever exactly going to make a huge dent in foreclosures, but it sure isn’t going to help much if this kind of banking incompetence continues. Even the banks admit their systems are screwed.

But the Times buries the lede on this one—though it does make for a sweet kicker. It appears to have caught GMAC acting—if somehow not illegally, then incredibly unethically—on one home loan:

His clients, Dean and Nancy Piercy, owe $380,000 on the loan for their home in Shasta Lake, Calif. A logger, Mr. Piercy has lost work hours, making it hard for them keep up with their $2,048 monthly payment — soon set to rise.

Mr. Wasser has already negotiated a solution: GMAC will accept only $270,000 in repayment, allowing the couple to get a fixed rate mortgage from another bank.

But that suddenly is in disarray. The Piercys have been making their payments, but GMAC has been putting their checks aside, holding the money as “loss mitigation fees,” until their application is completed. It has notified credit bureaus that their loan is more than 90 days delinquent, which has lowered their credit score, disqualifying them for the next mortgage.

Mr. Wasser reaches GMAC’s loss mitigation department. He asks for the delinquency to be removed from their status. But that must be handled by a different department: customer service. He is transferred there, where Jessica picks up the call.

“We are not going to amend,” she says, after a strained back and forth.

So GMAC is preventing the mortgage from being modified by telling credit bureaus the couple is delinquent on their mortgage when they’re not. How is that not fraud? This is a revealing look at a separate story, too: The unaccountable power that creditors and credit bureaus have over people’s lives. Good luck challenging them.

You’ll cringe reading this story because it hits too close to home. All of us have been in similarly frustrating situations with, say, insurance companies more than we can count.

You know you’re read a good story when it clearly opens the door for a couple more. Great reporting by the Times

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.