Post image for Obama foreclosure prevention program gets mixed reviews

Obama foreclosure prevention program gets mixed reviews

by Adam Russett on February 1, 2011

More than half a million Americans were given permanent mortgage modifications as a result of the Obama administration's Home Affordable Modification Program (HAMP). A report released by the Treasury Department indicates that most recipients were qualified not because they purchased an unaffordable home, but because of the economy and high unemployment, CNNMoney.com reports.

Most telling about the recipients of the modifications was their median income. According to the Treasury Department, the figure was around $46,000, and many of their credit scores prevented them from obtaining loans. In addition, the average rate of their mortgages, even after they were modified, was around $232,000 – about five times the median household income.

The Obama administration has helped these homeowners by cutting their payments by about 40 percent, which has led some of the recipients to lower their monthly payments by as much as $1,000. However, there are still some individuals who have not been saved from foreclosure even with the government assistance.

The Huffington Post reports that more people have actually been turned away than helped by the program Most who did not receive help were turned down due to low income. Some families who have made payments still face foreclosures because of pre-existing back payments, late fees and other penalties. Still, banks such as JPMorgan Chase say the program is relatively successful.

"We try to help homeowners stay in their homes whenever possible through programs like HAMP and our own modification programs," Chase spokesman Tom Kelly told the news source. "We have helped nearly 500,000 families avoid foreclosure."

According to the figures from the Treasury Department, 60 percent of recipients who filed for assistance in December did so because they were facing a loss of income, while just 11 percent chose to borrow due to high mortgages. 

Previous post:

Next post: