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Obama Program to Contain Foreclosed Homes: Is It Working?
June 18th, 2009 by 
Joseph Smith
Many Americans have been asking if the Obama administration’s Making Home Affordable program which was launched to address the problem of large numbers of foreclosed homes nationwide is working.
Critics have been complaining that the program has not made a dent on foreclosures, particularly after the release of data showing that foreclosure filings in May still surpassed the 300,000 level.
But federal housing officials, several housing organizations and supporters of President Obama have been insisting that the program has prevented huge increases in foreclosed homes, citing figures of homeowners helped in the thousands.
Since there is no mechanism yet established to monitor the results of the Obama program to contain foreclosed homes, personal stories of those who applied for the program can perhaps give a glimpse of how the program is working.
A home loan consultant in Phoenix, Arizona lost his mortgage consulting business when the subprime crisis began. Last year, he applied many times for the Hope for Homeowners program but was rejected every time.
In February this year, he wrote to his primary lender, Aurora Loan Services, and his second mortgage holder, Washington Mutual, and told them he could no longer afford to pay his loan. Surprisingly, Washington Mutual wrote him back, telling him it would lower his rate from more than 11 percent to 5 percent.
Later, Aurora Services also wrote back and agreed to reduce his monthly payment from $2,000 to $1,400. This loan consultant is grateful that he was able to modify his loan under the government program and prevent his house from being added to long lists of foreclosed homes.
In Manchester, Connecticut, a quality analyst applied for refinancing for his $352,000 loan to cut his 7-percent interest and save at least $600 a month. His loan was originated by Countrywide, which was later acquired by Bank of America.
To this analyst’s frustration, Bank of America customer service agents were not helpful as he expected.
A computer program in New Cumberland, Pennsylvania wanted to refinance his primary loan of $260,000 and his second mortgage loan of $90,000, hoping to reduce his six-percent mortgage range to the four-percent range.
After months of talking with agents over the phone, he was finally turned down because his home equity is not enough to qualify for a refinanced loan.
The Obama program has been assessed differently in the past months. Over time, the number of Americans who have saved or not saved their houses from becoming foreclosed homes will tell whether the program has been successful or not.
