Program Failed to Contain Foreclosed Homes in First 6 Months
July 16th, 2009 by 
Joseph Smith
Based on a report on foreclosed homes nationwide in the first 6 months of 2009, the Making Home Affordable Program failed to make a substantial dent on foreclosures across the country.
The continuing rise in the number of jobless homeowners and the worsening effects of the recession also stepped up the pace of foreclosures.
The report showed that almost 15 percent of all homeowners in the country suffered the risk of seeing their houses turn into foreclosed homes, affecting over 1.5 million families with mortgage loans in the first 6 months of this year.
The Obama administration provided mortgage banks with billions to modify troubled mortgages and continually expanded and tweaked his program to respond to the needs of borrowers, but still, his program failed to stop further foreclosure actions.
Based on the report, the number of foreclosure notices increased in June to over 336,000, a five-percent increase compared to the previous month and represented a rise of over 33 percent from June 2008. The increase also marked the fourth consecutive month that the number of foreclosure notices exceeded the 300,000 level.
Again, the state of Nevada had the biggest foreclosure rate, with over six percent of homeowners given a foreclosure notice. The second and third states with the biggest rates were Arizona and Florida. The other two states in the top five in June foreclosure rates were California and Utah.
Recently, in response to pressure from lawmakers and housing advocates, HUD Secretary Shaun Donovan and Treasury Secretary Timothy Geithner wrote to the heads of the country’s largest mortgage lenders and servicers and urged them to accelerate their efforts to contain foreclosed homes.
But complaints about the failure of mortgage lenders to modify more loans continue to intensify. Critics point out to the refusal of many lenders to incorporate loan modifications in their automated systems.
Despite the press releases by some of the large mortgage banks about their efforts to reduce the number of foreclosed homes, housing counselors are complaining about the difficulties in contacting bank personnel authorized to make loan modification decisions. They also complain about misplaced documents and constant changes in their loan modification process.
Based on a previous report from the Treasury Department, 25 mortgage lenders have committed to participate in the Making Home Affordable program and more than 130,000 loan modifications have been worked out. But the large number of houses at risk of becoming foreclosed homes in June showed that the federal government needs to make a big, bold move to contain the foreclosure problem.
