The U. S. government's mortgage relief plan provided help to only 7 percent of borrowers who signed up last year. About 900,000 borrowers have enrolled in the $75 billion program since it launched in March, according to the Treasury Department.
As of last month, the report shows that servicers have only converted 31,382 modifications to the permanent phase. Only about 66,500 homeowners had received permanent relief. Another 46,000 have been approved and should be finalized soon.
Goals and problems of the Plan include:
- Make borrowers' mortgages more affordable by reducing the mortgage interest rate to as low as 2 percent.
- Temporary modifications become permanent after borrowers make three payments on time and complete necessary paperwork.
- The mortgage companies say they have struggled to get homeowners to return the necessary paperwork.
- The Treasury Department is pressing the 102 mortgage companies that are participating in the program to do a better job.
- Homeowners and housing counselors say navigating the bureaucratic maze often seems impossible.
The nation's economic woes have made more borrowers fall behind on their payments. More than half of the borrowers approved for a loan modification have seen their income cut, according to the Treasury Department.