WASHINGTON — The number of homeowners dropping out of the Obama administration’s main mortgage-assistance plan is growing and is almost equal to the number who have received permanent relief.
The Treasury Department’s report Monday was the latest evidence of problems in the administration’s $75 billion program.
While officials insist the program is helping the housing market turn around, critics say it is merely delaying an inevitable surge in foreclosures.
More than 299,000 homeowners had received permanent loan modifications as of last month, Treasury said. That’s about 25 percent of the 1.2 million who have started the program since its March 2009 launch. They are paying, on average, $516 less each month.
However, the number of people who started the process but failed to get their mortgages permanently modified rose drastically in April.
To complete the program, borrowers must make at least three payments on time. About 277,000 homeowners, or 23 percent of those enrolled, have dropped out during that trial phase. That’s up from about 155,000 a month earlier, or a 79 percent increase.
Many borrowers are still stuck in limbo, unable to complete the process and caught up in an often-bewildering bureaucracy.
“These mortgage companies have to get it together,” said Henrietta Thompson, housing coordinator with United Family Services in Charlotte, N.C. “We’re not getting anything done.”
Treasury officials acknowledge that long delays have been a problem.
“Homeowners are waiting. We want them to get answers as rapidly as possible,” said Herbert Allison, an assistant Treasury secretary.
After a one-year struggle with JPMorgan Chase, Giselle Embry, 56, of Escondido, Calif., was finally able to get a loan modification through the program.
“They kept calling me and asking me to send the same things,” she said. “I felt like they just wanted to run me around until I got so frustrated that I gave up.”
A Chase spokeswoman declined to comment on Embry’s case. She said the bank has hired 9,000 workers to handle foreclosure cases, opened 51 centers around the country where borrowers can meet with bank officials and held foreclosure-prevention events around the country.
