Any Progress With The Making Homes Affordable Program?

Ever wonder how those loan modifications started by the Making Homes Affordable Program are coming along?  I did a bit of research and found an article in Bloomberg.com today reporting on the progress the programs have made. 

According to the Treasury Department, US lenders have permanently modified only 31,382 mortgages out of their goal of 4 million loan relief.  At present, more than 697,000 are in trial modifications through November 2009.   The Treasury Department disclosed how small the percentage of the loans converted to permanent modified mortgages to initiate efforts in pressuring the lenders into taking more action that will result in bolstering the administration’s foreclosure prevention plan. 

Here are some interesting facts and data from some industry experts:

Ever since the housing slump started about 3 years ago, home values have been reduced at least 28% nationwide (according to government and industry data).  And in addition, almost 23% of homeowners owe more than the value of their properties, (as per First American Core Logic, a real-estate data company) and a record of 7.9 million US homeowners fell behind on their mortgages in the 3^rd quarter (data from the Mortgage Bankers Association). 

The program is geared towards aiding millions of borrowers in danger of foreclosure to enable them to lower their payments by a variety of methods which includes negotiating the length of the mortgage terms, lowering their interest rates or changing some other mortgage contract terms.  Banks and lenders that received TARP money are required  to participate in this $75 billion program that endeavor to save millions of families from losing their homes.  However, there are those of the opinion that this program will not succeed unless the lenders reduce the outstanding principal because they believe negative equity is the major reason that is driving the foreclosures. 

I will keep you updated on any developments of this program.  Let’s hope whether it be lowering interest rates, extending the mortgage term or forbearing the outstanding principal, this massive investment of taxpayers’ money will eventually result in halting and hopefully even reversing this housing crisis which has permeated not only our nation’s entire economy but have also affected every aspect of our lives.