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.
I understand the need to bring reality back into the housing market. Prices were hugely overinflated and that needs to be brought in line. 'We can debate forever who's fault it is but seriously? i don't care. We need it fixed. There is another side, however. Banks are coming down hard on the people who have paid their bills. Pulling back equity lines regardless of loan to value ratios. In my case they insisted on a 54% loan to value ratio to retain my equity line. This pulls back funds that could be available to keep the economy going. This problem is also affecting many Seniors who are living off of reverse mortgages. I"m hoping someone is trying to keep tabs on these banks and their methods to stay solvent. Punishing those who have played by the rules seems counter productive, but banks aren't behaving rationally these days. In fact, i've seriously lost faith in banks entirely. I don't think they have any idea what they are doing.
Great Job President Obama! Your plans for our recovery are slowing taking hold and improving our economy and our confiidence in the future. The housing assistance is just one of many very successful programs that have helped millions.
Thank you for pushing so hard for programs that help the average American. You are the People's President and truly care and understand what we must deal with in our daily lives.
We are behind you on healthcare reform and hope Congress will grow a spine and pass the legislation we need.
Shame on Republicans for doing NOTHING this entire year except telling lies, spreading fear, spreading hate, and only showing concern for the large corporations and insurance companies who pay them to continue to destroy the lives of Americans. The Party of NO is dishonorable and clueless on the reality of life in America.
Right on President Obama! Your plan of action is begining to work. Righties will pee in their tidy whities.
WONDERFUL! I've been renting a cramped little apartment for the last several years trying to do the RESPONSIBLE thing and save up a substantial down payment before I sprung for a house. Now I find out that I could have been in a house a few years ago–an EXPENSIVE HOUSE–and when I got into trouble with the payments, I could have just sat back and let the governement and my fellow consumers and taxpayers pick up my slack. Serves me right for trying to be responsible and do the right thing.
AMERICA......LAND OF THE FREE-LOADER.......HOME OF THE BRAZEN.
I am wondering just how the idea works where you spend money to get out of debt and borrow money that you don't know where the money will come from to pay back, Debt is a curse which means you are a slave to the lender. There is always a day when it comes due... China anyone? There are so many things wrong with Washington leaders on both sides that need to get a reality check on spending. They are pretending that these numbers on paper are theirs to do with what they want. They need to run it like the average American family does. Don't spend what you don't have. If I don't pay my bills, there are consequences and no one bails me out, but yet my taxes every week are going to a group of spend thrift people who don't know how to run a government for the people. Washington needs to be cleaned out from top to bottom. The Leaders all need to punch a clock take a wage decrease and live there year round and serve the people.
Just to correct an error. Unemployment has increased by 7.4 million during the recession to stand at 14.9 million. We do not have 30 million people unemployed. Bloggers just make up crap.
Tim, you are barking up the wrong tree. Obama can only make the rules for the big dogs to follow but he can't make you refinance your house or get a job. It is up to the people who holds the key to our success. Please people if you use common sense and help the President then you will get the help you need. People just can't keep tearing him down and hope that everything will be alright for them. No it do not work like that. You have to give a little to get something.
Nice bail out for people that bit off way more than they could chew. So now lets talk about the legislation put into place to prevent this from happening again. Um, uh, well, we, uh, what exactly did we do to prevent this from happening again?
yes, we the people get the peanuts while the Big guys steal the Treasury. Wake Up, America for the 4th Reich is upon us right now. Do not be lulled to sleep by little bribes as the Big Pharma's, Big Agribusiness (Monsanto et al), Big Oily, Big Bankers, Big Wall Street, Big Military-Industril (Blackwater, KBR, GE, Monsanto, Exxon-Mobil, Bit Tobacco, Big Crack et al, etc. The Republicon (neocon) scam is to downsize Government while declaring it is incompetent because these make it as such, bankruptig We The People as they consolidate all of the power. Were we to resist, we will find the WMD's in our face as the barrel (Mao) of the Gun rules supreme, control, power and finally Money creates Big New World Order (IMF, World Bank, WTO) as it continues to steamroll over this world to create the visions their sponsors/teachers (Milton Friedman, Chicago Boys (Klein)) enact the doctrine in waves of destroying the founding fathers dreams for us. Take our the Executive Branch, the Congress (long gone) and finally finish to incremental take-over of the Supreme Court. THIS IS WHAT WE ARE SEEING! Give the people a bone and give the best to the elites. if you think this is anything new, think again and read these books. There are many more! Peace
For those who say cash for clunkers is a waste, ask US auto industry how it helped save them survive. Think about the population that depend one way or another on the auto industry.
Cash for clunkers allowed the production lines to start moving again and that is a good thing.
I have a clunker but I do not qualify and I still support the program wholehartedly.
God bless Obama and give him the strength, the wisdom and fortitude to keep doing what is right for the country
Barack Obama the No-Hitter. No Honour... No Integrity.... No Truth...
12%. Now that is a healthy amount.
As a suffering small business owner I have seen no help or support of any kind from the Obama stimilus.
Under his plan small business loan plans have been setup but no one will make them.
It seems that bringing jobs back to America as a solution is a thought that is beyond the mental capacity of those running our country.
The current AARP Newsletter explains health care coverage fully. There are absolutely no so-called "death panels" but Palin insists on reiterating and spreading this ridiculous lie. Why do we even bother to pay attention to this "attention seeking" Republican! Palin, please stay home, take care of your children, and go fishing with your husband! You have no business expressing an opinion which does not make sense, but only serves to incite and misinform the public.
Cash for clunkers did a lot to help the auto industry of Japan. It also has greatly increased the cost of used cars for those people who have never been able to afford a new one.
The program did momentarily help local dealers but it will hurt their sales in the long run.
And I don't really like having to pay for someone elses auto with my children's tax dollars.
Another failed program by obama, remember when he lied about the stimulus package keeping unemployment under 8%, believe we are above 9.6% now, what a visionary...
The Banks are not following the rules for this program, And how do you Know there all dead beats what if they lost their Job? or in Medical debt because their Health Insurance company denied them coverage? But then again republicans only think they are Responsible ugh
Leave the republicans behind and pass healthcare, and all other major bills, without them.
Republicans are worthless liars, and they are shaming our country.
Only thing Obama is doing is making the freeloaders even more prosperous. How about the hard working individuals who have always paid their taxes, never accepted welfare, decided to work for a living Why don't you help those individuals when things are down for them??? No it is the same old freeloaders that take advantage of it all!
I see it all around me, good people that are denied because they are not in the lazy, I don't want to work inner circle!!
Please this is just a trumped up welfare system that will only inherit more illegitate babies to feed on welfare!!
Do Nothing and let the country failed has always been GOP motto
along with Tax cuts to the rich and who cares about the little guy.
This president is doing the opposite, now wonder, GOP is getting mad because Obama doesn't follow their principal or believes
This, along with Cash for Clunkers, should be a wake-up call for those who think a public health care option is the only way to go. If the government runs these small (relative to health care) programs like this, what is going to happen with healthcare? Folks who abdicate authority to the government are just too lazy, dumb, or apathetic to take care of themselves. What a mess this country is in!
Reality meets grandiosity
The twelve percent number is about the same for the amount the gov has paid back for clunkers. WooHoo way to go uhbamy.
rewarding bad behavior. my tax dollars at work.
This is all garbage. Who is going to invest in banks, where there monies are wasted. You cant get a morgage you cant afford. You cant own a building you cant afford to pay for. Bank monies belong to someone else. Not Barack Obama, or the Government...
I love this president. He has really done a good job. I will be rooting for him tonight.
His hair is getting a little gray, but yours would too if you had the "Do Nothing Death Eaters" breathing down your neck 24/7. I hope the GOPers take a long walk on a short pier.