The Treasury reports the attainment of a "key milestone"in the Home Affordable Modification Program (HAMP) in that more than 500,000 trials have begun. The program is aimed at those homeowners who are behind in their mortgage payments and facing foreclosure. It lowers their payments for three months. If the homeowner can meet the payments for those months, then he can stay in the program for five years or more.
Just how meaningful in this milestone? The program started in May with 55,000 homeowners. 1,711 have completed the program. That's a little over 3%. The Congressional Oversight Panel points out that foreclosures are running at double the number of new trials. The panel also concluded "It increasingly appears that HAMP is targeted at the housing crisis as it existed six months ago, rather than as it exists right now." "The result for many homeowners could be that foreclosure is delayed, not avoided."
The companies involved in the program have not been exactly knocking it out of the park. BofA has only process 7% of the eligible loans. Citi and JP have done better at 26% and 25%, respectively.
Sure, 500,000 cases have been started. But, how many are completed? How many are needed?
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