Submitted by Jen Jones on Tue, 05/18/2010 - 12:17pm
Just two months ago, the Obama administration reworked its troubled $75 billion foreclosure prevention plan. The revamped Home Affordable Modification Program (or HAMP), put into play an attempt to help those hardest hit by the housing crisis, targeting homeowners who were unemployed or underwater in their mortgages (owing more on their loans than their homes are worth).
While only 170,000 homeowners to that point had completed loan modifications under the President’s plan—out of 1.1 million who began the government's HAMP last year—the current effort was designed to help a total of three million to four million homeowners avoid foreclosure by the end of 2012.
But new data released this week shows that more than twice as many homeowners were kicked out of HAMP just last month as were granted permanent relief.
According to The Huffington Post’s translation of the data by reporter Shahien Nasiripour, “More than 123,000 homeowners were bounced from the administration's Home Affordable Modification Program in April versus about 60,000 who were offered five-year plans of lowered monthly payments. This is the first month since the administration started reporting cancellation figures that the number of canceled modifications outpaced the number of new permanent modification offers. The number of canceled modifications skyrocketed 82 percent in April compared to March.”
The data shows that more homeowners were booted from the program in April, merely one month after the new “improvements,” than there were new permanent and trial modifications combined. According to the Treasury Department, cancellations were approximately 27 percent higher than the number of new trial and permanent modifications.
"I think it's great to take these numbers in context... with the broad efforts to stabilize the housing market," David Stevens, chief of the Federal Housing Administration told The Huffington Post, pointing out that home prices and the number of new foreclosures have started to level out with news of the economic recovery. Steves credited President Obama’s continued support of keeping interest rates down with more homeowners being able to refinance their mortgages into lower rates, as well as lower payments, and less folks in the throes of foreclosure. In the meantime, trial modifications have been offered to more than 1.2 million homeowners during the program’s year-long run.
"You know, while enabling eligible homeowners to modify their mortgages is vital to addressing the housing crisis with HAMP, it's also extremely important to keep this in context that this is just one part of the administration's comprehensive approach to assisting homeowners and stabilizing the housing market," said Stevens.
"We don't claim that the housing market is totally out of the woods, but it's certainly showing signs of stabilizing," Herbert M. Allison Jr., assistant secretary for financial stability at the Treasury Department reported to HuffPost. Allison cautioned that "perhaps" more mortgage holders would be kicked out of HAMP before it gets better, allowing new rules to level the current home ownership playing field.
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