Recently the House Financial Services Committee took a look at the performance of the Obama administration’s foreclosure-avoidance program in early October; here is what came out of that hearing and it doesn’t look good:
1) HAMP – designated to help as many as 4 million troubled homeowners modify the terms of their mortgage and obtain more affordable payments. The program has resulted in approximately 800,000 permanent modifications and 106,000 trial modifications still ongoing, according to Darius Kingsley, deputy chief of Treasury’s Homeownership Preservation office. These figures are far less than the original target.
2) Emergency Homeowner’s Loan Program – The Dodd-Frank financial reform law authorized $1 billion to provide bridge loans of up to $50,000 for homeowners who had experienced sudden drops in income because of employment or medical problems. As of Sept. 28, it has resulted in 12,000 completed transactions and is expected to use just $400-$500 million of the authorized $1 billion, according to acting FHA commissioner Carol Galante. The 12,000 funded cases were all that HUD could manage to approve out of 100,000 applications.
3) FHA Refinance Program, aka “Short Refi” This was designed to help as many as 1.5 million underwater owners refinance into affordable FHA loans, and was funded by $8 billion originally set aside for HAMP. As of the end of September, FHA and the program’s 27 participating lenders had completed just 334 refinancings according to the agency.
4) HARP – The administrations signature program for homeowners who have lost equity because of declining home prices but who nonetheless have stayed current on their payments. Only borrowers with loan-to-value ratios above 80 percent and no higher than 125 percent are eligible. Originally projected to help between 4-5 million homeowners, as of August it had resulted in 838,000 refinancings.
- Obama’s housing scorecard (money.cnn.com)