The Make Home Affordable mortgage loan modification program was one of Obama’s first acts as president. Many protested it at the time. The program works with loan companies and mortgage modification officers to make the payments easier on homeowners. However, people in the program have proved to be likely to default. They’re also more likely not to succeed in the program. More people drop out than stay in the program.
Majority of homeowners drop out or get dropped
According to CNN Money, 96,025 people who had applied for trials dropped out of the mortgage modification program in July. So far, 616,389 people got into mortgage loan modification and then dropped out. Only 434,717 have been successful. That’s a 60 percent, roughly, rate of failure. That means a person is more likely to not have a successful outcome if they do enroll in the program. It seems the program, in most cases, is a mechanism for prolonging the inevitable, and has mostly helped mortgage brokers get more work.
Fewer people entering the program
There is a three-month trial phase for applicants before they can get permanent modifications. There were 24,577 trial modifications granted in July, compared with 38,728 for June, according to the Wall Street Journal. However, in July there were 37,000 permanent modifications granted. There were 51,025 in June. The program either needs more short term cash or fewer people can apply or need modification.
Not the biggest success
In July, 12,912 people dropped from their permanent modifications. There were 272 people who left the program because they paid their mortgages off. What this ultimately means is that the program has not been as successful as planned. This also means that even people who apply for the program and get in have a 60 percent chance of failing.
Find more information on this subject
CNN Money: http://money.cnn.com/2010/08/20/news/economy/foreclosure_prevention_HAMP/
Wall Street Journal: http://online.wsj.com/article/SB10001424052748703579804575441701960735166.html
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