September 9th, 2009
11:33 AM ET
5 years ago

12 percent of borrowers helped by Obama plan

The Obama administration has come under fire for the program's rocky start.
The Obama administration has come under fire for the program's rocky start.

NEW YORK (CNNMoney.com) – Mortgage servicers have placed 12% of eligible troubled borrowers into trial modifications under President Obama's foreclosure prevention plan, the Treasury Department said Wednesday.

The progress report, the second issued by the government, says that 360,165 homeowners who were at least two months behind in payments received relief through August. A month ago, just 9%, or 235,247 borrowers, were in trial modifications.

The Obama administration has come under fire for the program's rocky start. Officials, who met with servicers in Washington in late July, said they are on track to hit their goal of 500,000 loan modifications under way by Nov. 1.

"Our progress in implementing these programs to date has been substantial, but we recognize that much more has to be done to help
homeowners," said Michael Barr, an assistant Treasury secretary, in prepared testimony before a House Financial Services Committee panel.


The $75 billion initiative was announced in February and the first institutions to join began accepting applications in April. The plan, which is
projected to help up to 4 million homeowners, calls for servicers to reduce the monthly payments of eligible borrowers to no more than 31% of their pre-tax income.

Some 47 servicers are participating in the Obama program, up from 38 servicers a month ago. Financial institutions, borrowers and mortgage investors all receive incentives for participating in the program.

By releasing the servicers' progress reports each month, the administration is hoping to hold institutions responsible for their performance. The updates will allow the public to see which institutions are lagging in implementing the plan.

After the August report came out, servicers acknowledged they needed to improve their performance and promised to do better in the future.

Borrowers are complaining that servicers are not responding to their calls and applications, losing their paperwork or not making decisions. The financial institutions said they are ramping up their staffing and computer systems to handle the crush of applications.

Moving quickly is important. The number of people falling behind on their payments continues to mount, especially as unemployment rises.

A record number of foreclosure filings were posted in July, according to RealtyTrac. There were more than 360,000 properties with foreclosure filings - including default notices, scheduled auctions and bank repossessions - an increase of 7% from June and 32% from July 2008.

soundoff (78 Responses)
  1. Robert

    This REPUBLICAN like the rest are not worth a comment, bye.

    September 9, 2009 11:37 am at 11:37 am |
  2. Jimmy the Greek

    Foreclosures will continue GOING THROUGH THE ROOF!!

    When the government rewards bad behavior (giving free money to people who bought they couldn't afford).... those SAME irresponsible individuals will surely stop paying anything towards the mortgage in hopes of getting a government hand-out.

    It's called GAMING THE SYSTEM.

    Thanks Barack. Thanks for taking OUR tax-dollars and throwing it into the fire.

    September 9, 2009 11:38 am at 11:38 am |
  3. Bob

    I know the banks are just stalling so they can make a fortune when they foreclose, plus they want the mortgage rates up and they get the money from Obama. I wish Obama would force them to comply.

    September 9, 2009 11:39 am at 11:39 am |
  4. Fair is Fair

    12%, huh? WOW. You should be VERY proud, Mr. Prez. Last time anyone I know got 12% correct on a test was thrown out of school.

    How's that hope and change, suckers?

    September 9, 2009 11:41 am at 11:41 am |
  5. Ashley

    I currently have a Freddy Mac loan with Aurora Loan Services. I have contacted them since April trying to refinance because my house does not apraize for what I paid. They have yet to finalize the Freddy Mac loan modifications or refinance. Its great that Obama wants to help the people, but you have companies that have yet to do anything about it. They have had the money since March. What are they doing with it?

    September 9, 2009 11:41 am at 11:41 am |
  6. Some republican guy

    What a bunch of mooches. Why should my tax dollars go to support a bunch of non-working, crystal meth smoking, NASCAR watching welfare cases. They should get a job like us hard working real Americans. Have a nice day!

    September 9, 2009 11:42 am at 11:42 am |
  7. Jacques

    What is the government going to do to make sure these deadbeats finally pay on time, or move back to a rental apartment?

    September 9, 2009 11:43 am at 11:43 am |
  8. Dominican mama 4 Obama

    Here come the "hands-out" Republicans, do-nothing-but-criticize-EVERYTHING-idiots:" Waaah, waaah! ONLY 12%??! Waaah, Waaah! My lil' granny is losing her home tomorrow! You gotta do more NOW, FASTER for us non-contributors-to- helping- America- out-of-the-crapper!!!

    Meanwhile they will swear on their firstborn that President Obama has done nothing to help the taxpayers. Hypocrites, and opportunists these are your modern day Republicans. They will take what you've got, and claim you gave them nothing.

    September 9, 2009 11:44 am at 11:44 am |
  9. Anonymous

    Palin sounds great.. just like a candidate ready to address the nations needs... but one question must be answered... why do we non Alaskan residents that dont receive any type of government kick backs have to give up half of their pay check to be able to receive medical coverage.. Why is it that the upper class residents don't have to pay the same portions as we the lower class... sorry we just dont qualify as middle class anymore.. by the way who is paying for your healthcare... are you under cobra or do you have room for one more person on your band wagon so that I can get free healthcare or priced reduced healthcare? The only reason that you gave up your position as governor is to be able to make more money working as a lobbyist for the republican party.. little woman with a big mouth.. who could stop that ... no body.. who could hear the voices of the poor if you are talking for the rich ... your employers... great job.. keep it up..

    September 9, 2009 11:48 am at 11:48 am |
  10. Expat American

    Yes, indeed...or course there isn't a single Republican who bought a house they couldn't afford. Just like there are only uninsured Democrats and not a single Conservative is on welfare. God probably pays their rent and mails them their junk food stamps. It's only them 'Lazy Socialist Liberals' who are bleedin’ the system. Aaaargh!

    September 9, 2009 11:48 am at 11:48 am |
  11. Laura in KS

    Smaller government means fewer people making all the decisions that affect your lives and your freedoms...

    September 9, 2009 11:49 am at 11:49 am |
  12. Expat American

    Yes, indeed...of course there isn't a single Republican who bought a house they couldn't afford. Just like there are only uninsured Democrats and not a single Conservative is on welfare. God probably pays their rent and sends them their junk food stamps. It's only them 'Lazy Socialist Liberals' who are bleedin’ the system. Aaaargh!

    September 9, 2009 11:50 am at 11:50 am |
  13. Reconsidering my 2010 Vote

    It's nice to know that by me paying my mortgage payments on time and the taxes that come with working and paying that over 360,000 idiots have been helped. Wonder when their cash for clunker deals will start to fall through.......I guess I'll be there to support the same 360,000 for their new cars as well. Then we can move on to me paying for their health care and who knows , maybe the government will decide that everyone deserves a new boat, jet ski, and a vacation in Tahiti too !!!!!

    September 9, 2009 11:52 am at 11:52 am |
  14. American And Proud!

    Whenever I'm discouraged about our country's back a few years aga, I remember Ronald Reagan. He was a tragedy, a train wreck with retarded theories, such as Trickle Down economics, which almost wrecked our nation. I remember Bush, the worst President in all of history. And then I look how far we came in such a short time, electing one of the greatest presidents of all time, Obama. He considers america's best interests, rather then how to kill some foreign people or how to keep the rich rich and the poor holding their hands open waiting for something to trickle down. I also recall the years of Clinton, while not perfect, far better then any term any republican ever served with the exception of Lincoln (The republicans one and only great president, and a great one he was!).

    Nowithstanding the Reagan/Bush/Bush "interludes," WE WILL CONTINUE THIS MOMENTUM!

    I just know it! We are America — the GREATEST experiment in democracy ever!

    God bless America!

    September 9, 2009 11:54 am at 11:54 am |
  15. phoenix86

    Reinflating that bubble.

    September 9, 2009 11:54 am at 11:54 am |
  16. Jay T.

    Obama and his administration have pulled us out of a recession and he isn't even on pace to run up the national debt as much as Bushie did. By this time in Bushies administration, we had been attacked on American soil and were poised to get bogged down in a quagmire of a war. What do you want from Obama? So, I say to all the Right Wing loonies, shut it!

    September 9, 2009 11:55 am at 11:55 am |
  17. LISA

    I got your back Mr. President. Keep up the good work! Most Americans have common sense. The other 30% well you know..You hear them on TV..

    September 9, 2009 11:57 am at 11:57 am |
  18. AntiRush

    I love the fact that people think that a major program like this can be put into place, and just run perfectly from day one. Major programs, whether initiated by the government, or in private corporations, rarely run smoothly from day one. There are always fits and starts, and problems to be dealt with. If the program is properly administered, it will run better and better as time goes on.

    September 9, 2009 11:57 am at 11:57 am |
  19. Chris - Denver

    That's 12% more than would have been helped by John "Let them eat cake" McCain.

    September 9, 2009 12:00 pm at 12:00 pm |
  20. Debbie

    The initial bad/toxic loans were allowed and loaned to people who flat out could not afford them. It was a scam by lenders to line their pockets. Then when the banks began to fail it was Paulson that gave the money. So I don't blame Obama this all was allowed and went down under the Bush Administration. Lesson learned... Don't trust banks, insurance companies, or auto makers.

    September 9, 2009 12:03 pm at 12:03 pm |
  21. Truth-Bomb Thrower

    In this case, "borrower" is a another word for an irresponsible spendthrift with a warped sense of self-entitlement....like the hispanic woman school bus driver in New Jersey who bought the $800,000 house–a house that us taxpayers and consumers are probably now paying to keep her in. The overwhelming majority of these people are in the mess they are in due to their own GREED and STUPIDITY. Just another example of the federal government rewarding bad behavior-at the expense of the rest of us. LET THESE PEOPLE GET THROWN OUT IN THE STREET!

    September 9, 2009 12:05 pm at 12:05 pm |
  22. Chip

    With the glowing success of this, wait until they bring you health care.

    CNN, why no story about the cloture vote coming on Cass Sunstein today. Is he not as important as Sarah Palin, or are you cloaking that story at the administration's behest?

    September 9, 2009 12:07 pm at 12:07 pm |
  23. inofritzn

    If 12% = 360.165 eligible slackers then 100% = 3,001,375 total eligible loans!!! Holy cow people get your life together and stop spending more then you can afford! We share a big portion of blame for this economy.

    September 9, 2009 12:08 pm at 12:08 pm |
  24. Bertina

    Good one Laura, Oligarchy is better than socialism?

    September 9, 2009 12:10 pm at 12:10 pm |
  25. Lynda/Minnesota

    And if McCain were president ... ?

    September 9, 2009 12:11 pm at 12:11 pm |
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