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Is Obama’s Mortgage Assistance Reaching You
President Obama’s mortgage relief program is now reaching 20% of those eligible for the program, or 650,000 borrowers, according to a new government report. More than 650,000 people have signed up for trials that will last at least five months, according to the Treasury Department for the program that had a slow beginning. As of last month, 16% of eligible homeowners had been reached with the program. Homeowners must be at least 60 days behind with their payments to be eligible.
Under modifications with the program, monthly payments will be reduced to an affordable amount–no more than 31% of a borrower’s pre-tax income. The president’s mortgage relief program began in March, but not many people applied at first. As of now, however, 920,000 loan modification offers have been given to about 3 million eligible homeowners. That is a total of 29 %. As of the end of July, offers had been made to only about 15% of eligible homeowners.
About 130,000 eligible California homeowners are enrolled in the “Making Home Affordable” loan modification program. President Obama introduced the program in February. Of the homeowners who were in foreclosure or two payments behind in the state, about 19% have enrolled.
Other states that have been hard hit by real estate problems have a similar amount of residents involved in the program. Arizona has 22% of eligible residents enrolled, Nevada, 18%. The number of people involved in Florida, 12% is much lower. Some believe that may be because a high number of investor owned homes did not qualify. The program is a $50 billion program.
Many housing advocated are still disappointed with the number of people who have signed up for the trials under the program. Government officials are pressing industry officials to improve performance. Many people have claimed that financial institutions lose their paperwork, transfer them repeatedly between departments, and ask them to fill out applications over and over.
Many economists are skeptical that President Obama will achieve his goal of reaching three to four million borrowers with the program within three years.
Those interested in President Obama’s mortgage relief program must complete a huge stack of paperwork to apply. They must also show they can make their payments on time. According to RealtyTrac, an online marketer of foreclosed homes, 937,840 homeowners filed for foreclosure in the third quarter of this year. Some housing counselors say the number of people being assisted by President Obama’s program is not nearly as high as the number of people being foreclosed upon.
John Taylor, head of the National Community Reinvestment Coalition says the president’s plan is “lagging behind” the number of foreclosures. Administration officials, however, say the program is on track.
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