(8 am. – promoted by ek hornbeck)
Foreclosure Crisis: The Gov’t Response, Decoded
from Alexandra Andrews, ProPublica, April 29, 2009 2:02 pm EDT
By now, you’ve probably heard about the Obama administration’s Making Home Affordable plan – the government’s most aggressive and wide-ranging attempt yet to stem the nationwide scourge of foreclosures. We’ll be tracking some homeowners as they make their way through the program, so we thought we’d lay out the plan in detail first.
We also wondered what was happening to the government’s other foreclosure-prevention efforts. Are borrowers still using them? FHA’s $300 billion Hope for Homeowners program isn’t seeing much action (so far, only a single homeowner has refinanced through the program), but some homeowners are finding relief through programs run by various government agencies, like the Department of Veterans Affairs.
[snip]The U.S. Department of Housing and Urban Development admits its ‘Hope for Homeowners’ program has fallen short.
But, even by HUD’s own account, this program has been an utter failure. Congress allotted $300 billion for it last summer, estimating that it would help up to 400,000 borrowers. But so far, just one has made it all the way through the program.
The main problem seems to be that borrowers must pay expensive fees to join the program, and lenders don’t have much of an incentive to participate. Efforts to overhaul the program are underway, centering on a bill that would authorize incentive payments of $2,500 to servicers for each refinance they complete. The bill, passed by the U.S. House of Representatives in March, stalled in the Senate, but a vote is expected on Thursday
6 comments
Skip to comment form
Author
for a single homeowner?
A government program that doesn’t work.
They can demand a service provider deliver anything as an outcome, but it doesn’t make it doable or reasonable. My guess is that they can’t get the banks to cooperate. Takes two to tango. If the banks won’t budge, who is going to make them?
They have done an absolutely crappy job of helping everyday people during this economic crisis, and it is an economic crisis.