NYT: Slow Start to Federal Plan for Modifying Mortgages

The Obama administration’s plan to help millions of troubled homeowners avoid foreclosure by reducing the size of their mortgage payments is just getting off the ground.

So far, two months after the program went into effect, about 55,000 homeowners have been extended loan modification offers, according to a senior administration official. At the same time, foreclosures continue apace. RealtyTrac reported Wednesday that foreclosure filings reached 342,000 last month, up 32 percent from April 2008. Moody’s has estimated that more than 2.1 million homeowners will lose their homes this year. Click here to read full article in New York Times.

You might want to review an entry from January 24, 2009, but i have cut and pasted for your convenience because most of you will be too lazy to search for th entry.

From EPD January 24, 3009

A Little Off on Our Projections Are We?

What do you say when the federal government's center piece program designed to assist 400,000 homeowners facing foreclosure only attracts 312 applicants? Mathematically speaking that puts the pace of the housing recovery at approximately 1,270 years give or take a little. Actually its even a little worse; purportedly less than half who applied actually utilized the program. So let's give HUD Secretary Steven Preston a round of applause for acknowledging the failure! (Applause).

HUD Chief Calls Aid on Mortgages A Failure
Congress Blamed For Shortcomings

By Dina ElBoghdady
Washington Post Staff Writer
Wednesday, December 17, 2008; A01

Secretary of Housing and Urban Development Steve Preston said the centerpiece of the federal government's effort to help struggling homeowners has been a failure and he's blaming Congress.

The three-year program was supposed to help 400,000 borrowers avoid foreclosure. But it has attracted only 312 applications since its October launch because it is too expensive and onerous for lenders and borrowers alike, Preston said in an interview.

"What most people don't understand is that this program was designed to the detail by Congress," Preston said. "Congress dotted the i's and crossed the t's for us, and unfortunately it has made this program tough to use."

The criticism comes as Congress prepares to weigh in with further plans to help distressed borrowers facing foreclosures, which are at the root of the financial meltdown. This week, House Speaker Nancy Pelosi (D-Calif.) demanded that the Treasury Department use some of the money from the $700 billion emergency rescue package to help at-risk homeowners. Click here to see article.