WASHINGTON - The Obama Administration's mortgage relief plan provided help to only 7 percent of borrowers who signed up last year - another black mark for the struggling program.
The plan was announced with great fanfare 11 months ago, but has done little to stem the foreclosure crisis or its drag on home prices. This week RealtyTrac Inc. reported that a record 2.8 million households had been threatened with foreclosure in 2009, up more than 20 percent from 2008. Home prices are down 30 percent nationally from their peak in mid-2006
As of last month, only about 66,500 homeowners of the 900,000 enrolled had received permanent relief, the Treasury Department said yesterday. Another 46,000 applications have been approved and should be completed soon.
Under the program, mortgages of homeowners in financial difficulties may be modified. Interest rates may be reduced to as low as 2 percent, the length of the loan extended, or the principal balance reduced.
Borrowers initially receive temporary modifications. Those are supposed to become permanent after homeowners make three payments on time and complete necessary paperwork. The mortgage companies say they have struggled to get homeowners to return the paperwork.
The government is pressing the 102 companies participating in the program to do a better job. But many lenders, including the nation's largest, Bank of America Corp., continue to perform poorly.