The government program that is supposed to stop 4 million foreclosures continues to have trouble keeping homeowners in the program.
The WSJ says:
Almost 530,000 of the nearly 1.3 million government modifications have been cancelled since the program began last March. Dropouts climbed as homeowners missed payments on their modified loans or failed to turn in required paperwork.
Nearly half of the homeowners who cancelled their trial modifications have found mortgage relief outside the program, the administration said, while less than 2% of cancellations have resulted in foreclosure.
The Obama administration said the effort would help up to 4 million people hold onto their homes. But critics say the program isn’t on track to meeting its goals as foreclosures continue to mount.
In fairness to the program, however, we should mention that financial institutions are responsible for processing the paperwork and there have been numerous reports that they are either disastrously incompetent or willfully sabotaging the modifications.
The banks, however, say that borrowers are not providing the necessary documents and are missing payments.