WASHINGTON — The Obama administration’s signature plan to help struggling borrowers continued to face head winds in September, with the number of homeowners receiving permanent help still well below original expectations.
The administration said fewer than 500,000 borrowers have received permanent loan modifications through the Making Home Affordable Program, which provides incentives to lenders to help borrowers avoid foreclosure. The program’s original goal was to reach 3 million to 4 million homeowners, but a report released Monday said more than half of the 1.37 million trial modifications started have been canceled.
Administration efforts have helped some homeowners, said Raphael Bostic, an assistant secretary at the Department of Housing and Urban Development.
“But, with many unavoidable foreclosures still in the pipeline, it’s clear that we have a hard road ahead,” he said in a statement.
The program’s progress was criticized by Neil Barofsky, the special inspector general for the $700 billion Troubled Asset Relief Program.
“The most specific of TARP’s Main Street goals, ‘preserving homeownership,’ has so far fallen woefully short,” Barofsky said in a report released Monday by his office.
The issue of how to respond to foreclosure has stymied policymakers in Washington since the Bush administration. The issue has taken on added significance recently amid revelations of major problems with how foreclosures are being processed.
