Remember back in 2009, when President Barack Obama introduced the Home Affordable Modification Program, or HAMP, by touting its goal of helping 3 million to 4 million borrowers keep their homes? The program has actually provided mortgage relief to fewer than a million to date.
The Wall Street Journal reported that Treasury Department statistics show the government program provided loan modifications to approximately 691,000 homeowners as of August.
The program pays lenders to reduce mortgage payments and avoid foreclosure. About 10,800 homeowners received permanent reductions in their loan balances, with a median write-down of 30.5 percent.
Critics of the program charge that it was rolled out too quickly and haphazardly, swamping the mortgage industry with applications it couldn't fulfill. The Treasury Department acknowledges that there were flaws and pledges to keep reaching out to homeowners who need assistance.
Another of the government's programs to help homeowners, the Home Affordable Refinance Program, HARP, is also sharply down from initial estimates. That program is open to homeowners with loans guaranteed by Fannie Mae and Freddie Mac and is meant to allow those whose homes declined in value to refinance to a lower mortgage rate without putting down additional cash. Though projected to help 4 million to 5 million homeowners, it only enrolled 865,000 through July.
Look for an announcement from the administration in the next couple of months about how they plan to make the programs more successful.
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