I don’t know if you saw or heard this last week.
The U S Treasury Department and the Department of Housing and Urban Development (HUD) issued a progress report on the impact of the Making Home Affordable Modification Program. This is the program to help people facing foreclosure save their homes. It was announced by the Obama Administration in early March.
Last week the treasury and HUD reported that more than 75% of all mortgages in the United States are covered by the Making Home Affordable Modification program.
You may recall that in this program eligible people who are facing foreclosure first are given a trial modification. Their mortgage payment is lowered to a level that the mortgage company and they feel they can make without any problem. A three month trial period is set up. During this trial period they make this new payment each month. If they make each of these 3 mortgage payments on time, the modification is made permanent.
Thus far the mortgage companies in this program have offered trial modifications to 55,000 people facing foreclosure. They have also sent letters with information about trial modifications to 300,000 other people.
It is going to be another 4 or 5 months before we find out how successful these trial modifications were and how many of these 55,000 people were able to pay their new lower monthly mortgage payment on time.
I want you to know that I am impressed. It looks like this Making Home Affordable Modification Program is off to a great start.
The Bush Administration implemented two separate programs which they said were to help people facing foreclosure save their homes. Both failed.
The first was the FHA Secure program. This was in effect from September 1, 2007 through December 31, 2008. This program was supposed to help 400,000 people. It only helped 4,000.
The second was the Hope for Homeowners Program. It started October 1, 2008 and runs until September 30, 2011. This program was also supposed to help 400,000. Thus far only one person has refinanced their mortgage through this program. The paperwork for 51 other applicants is being processed. Revisions are currently being made to this program to try to make it more successful.
It looks like The Making Home Affordable Modification Program is off to a better start because it was designed better. Its provisions actually are focused on helping those who are facing foreclosure save their homes.
The nice thing about the program is that it is still being modified. There have been two revisions in the last month which will enable the program to help more people.
If you are facing foreclosure, please check this program out.
Much Success,
Mark Elkins
