The foreclosure prevention aid that was provided through Home Affordable Modification Program has not been successful. In a recent report, it was revealed that about 520,000 people have received permanent modifications on their loans. That is an increase of five percent, which is approximately 23,750 more people benefited from the program until October 2010. A total of 755,000 people applied for loan modifications through the Home Affordable Modification Program. The program was suppose to help approximately three million homeowners, but has been successful in helping only about half million people.
However, the number of people who benefited from this program is less than the number of people who dropped out of the plan. The number of people rejected due to ineligibility is even higher. About 36,000 people suffering from foreclosure have dropped out of the Home Affordable Modification Program in October that is a jump of about 24 percent from the last month September. Roughly, 54 percent of people who applied for loan modification were rejected due to various reasons.
Another report mentioned that, during the July-September quarter, around 9.1 percent of population in the country missed at least one loan installment. However, this has reduced from 9.9 percent from the last quarter that is April to June. According to a report, 93,000 homes went under foreclosure in October 2010 and colossal 3.3 million houses went under foreclosure in a year’s time that is since September 2009 to September 2010.
Maxine Waters, a California based Democrat, said in the House Financial Service subcommittee that she felt HAMP was not fulfilling the purpose it was implemented for, and the lenders are not doing enough to work closely with the borrowers to solve the issue.
About $50 billion was allotted for the program; however, only $483 million have been spent until now. To help people in foreclosure, the lenders get about $1000 to rewrite the loan and another $1000 annually if the borrower pays the mortgage payments regularly for the next three years. Nevertheless, it has been a terrible experience for the borrowers to get a modification done as the banks keep losing their paperwork and blame the borrowers instead for not submitting the paperwork. Other than this, ineligibility and other frauds like the document scams have made it more difficult for people anguished by foreclosures to go through the shoddy modification process.
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