Over 1 Million Homeowners Kicked Off of Obama’s Home Modification Program Since it Began

More than 1 million homeowners have now been failed by President Obama’s Home Affordable Modification Program, HAMP, either by being turned down for a permanent modification or going into a re-default on their modification once it became permanent. All of those borrowers are now in a worse financial situation than when they started the program.

According to The Treasury Department 234,760 permanent modifications and 770,834 trial ones have been canceled since HAMP’s launch in 2009, for a total of 1,005,594 cancellations.

Prior to June 2010 the Treasury Department required banks to verify borrowers’ income in order to declare them eligible for the program, which is when a majority of the trial modifications were cancelled. Dozens of people who applied for modifications have stated to media outlets such as the Huffington Post and others that their banks strung them along for months, only to deny their applications for modifications after all. In some cases, borrowers said HAMP caused the foreclosure it was supposed to prevent.

The Treasury Department routinely, and dishonestly, counts the 234,760 permanent modifications that were eventually canceled as “people helped” by the program. It says that on page one of the HUD Housing Scorecard for August: “more than one million homeowners have received a permanent modification.” But doesn’t mention the nearly quarter of a million who redefaulted.  In all the modification program has a 23% redefault rate.

The president’s signature foreclosure mitigation program is active until the end of 2013, but it’s attracting fewer and fewer borrowers. The latest data, from July, showed just 14,100 sign-ups, down from 16,300 the previous month.

So is that what foaming the runway for the banks means?


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