Monday, August 23, 2010

Obama Housing Program Slowing To A Crawl While Homeowners Suffer

From Huffington

More than 18 months after President Barack Obama announced a $75 billion program to help three to four million homeowners avoid foreclosure, the administration's primary foreclosure-prevention initiative is slowing to a crawl.

Less than 17,000 homeowners were offered temporary trial plans in July under the Home Affordable Modification Program to reduce their monthly mortgage payments, an 86 percent decrease from the same period last year, according to Treasury Department data released Friday. About 37,000 homeowners transitioned from trial plans into permanently-modified mortgages, which offer years of lower monthly payments thanks to cuts in the mortgage's interest rate and extensions to the life of the mortgage. It's the lowest figure since December, and a 28 percent decrease from June's total.

More than 100,000 homeowners were bounced from the program, known as HAMP, last month as homeowners either fail to provide documentation verifying their situation, fell behind on their new, reduced payments (an indication of how deeply in debt they are) or their mortgage servicers simply kicked them out due to error, a common occurrence, according to homeowners, their advocates, and government auditors. It's a seven percent increase from June. An average of 108,000 homeowners per month have been kicked out since March 1.

About half, or 48 percent, of struggling homeowners who have entered the program since the spring of 2009 have been kicked out.

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