Obama’s Foreclosure help program, intended to bring financial relief to some four million homeowners having difficulty with mortgage payments, has fallen short of its goals, according to an assessment by the Troubled Asset Relief Program, presented to Congress on Wednesday.
To date, only 390,000 homeowners have realised mortgage loan modification terms on what they have borrowed – a relatively small proportion of the intended total who still seek foreclosure help.
“…$50 billion foreclosure help program…”
It was back in March 2009 that the $50 billion foreclosure help program was announced. Representatives of the Troubled Asset Relief Program told the Treasury Department at the time that they had to set out clear goals and state how they would be achieved. This was not done.
Foreclosure Help
“It’s a simple recommendation that we made, that Treasury put forth how many people it truly expects to help stay in their houses through permanent modifications,” said Neil M. Barofsky, special inspector general for the Troubled Asset Relief Program.
“It’s a recommendation that all three of us on this panel have made to Treasury and that Treasury has ignored.”
“others critical of foreclosure help program…”
Others, including Richard J Hillman, managing director for financial markets and community investment at the Government Accountability Office, have also said the same.
Another vocal critic of the way thing have been handled is Elizabeth Warren, chairwoman of the Congressional Oversight Panel.
“Fifteen months into this program, for every one family that appears to have made it to a permanent modification that’s likely to stabilize that family in that home, 10 more have been moved out through foreclosure,” said Ms Warren. “This is a program that’s just – it’s behind the curve.”
To be expected, the Treasury has disagreed with the general criticism. The assistant Treasury secretary, Herbert M Allison Jr, overseeing the foreclosure help program, said that criticisms had been overstated. He claimed that some 1.3 million homeowners have benefited through the program.
“…foreclosure help incentive payments…”
The government foreclosure help program offers incentive payments to mortgage providers when they offer mortgage loan modification to borrowers who are struggling. However, homeowners have to prove their hardship through rigorous documentation, which can be difficult in itself, before they can receive foreclosure help.
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- The Obama Mortgage Loan Modification Plan Offers a Ray of Hope
- The Mortgage Modification Program – Homeowners Lower Their Home Loan Payment
- Foreclosure Prevention: Obama’s Secret Weapon Could be Warren
- Foreclosure Program Struggles As Homeowners Drop Out
