WASHINGTON — The government may get only 20,000 troubled borrowers to refinance into more affordable home loans by next fall under a mortgage-aid program passed by lawmakers over the summer.
The $300 billion “Hope for Homeowners” program was launched Oct. 1. The Congressional Budget Office had projected it would let 400,000 troubled homeowners swap risky loans for conventional 30-year fixed- rate loans with lower rates.
But the early results are discouraging. The government received only 42 applications in the first two weeks, according to the Federal Housing Administration. The low turnout was first reported by the industry newsletter Housing Wire. Since the applications take about 60 days to process, no loans have been approved yet.
Steve O’Halloran, spokesman for the Department of Housing and Urban Development, called the projection of nearly 20,000 borrowers “an extremely preliminary estimate of early applications for a program that is barely a month old.”
Since the program requires lenders to voluntarily take a loss, it’s unclear how many lenders will participate.
