Making Home Affordable, the government's flagship homeowner assistance program, is falling far short of its goals, The Huffington Post reports.
Less than 20 percent of homeowners who theoretically qualify for a government mortgage modification are actually eligible according to data from the Treasury Department, the Post reported.
In February 2009, the government announced the commitment of $75 billion to fund two programs to help struggling homeowners avoid foreclosure. Making Home Affordable was one of them, which was aiming to help 3 million to 4 million borrowers.
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The program is supposed to allow homeowners to reduce their monthly payments to a level that is affordable.
MarketWatch says when the lenders voluntarily lower the interest rates, the government provides subsidies to the lenders.
But Huffington Post says that data show that though 4.6 million Americans have missed at least two mortgage payments — making them technically eligible — a whopping 80 percent of those borrowers cannot be helped by the program.
Just 900,000 actually qualify, the Post reports.
MarketWatch says that the Treasury also noted that banks have reduced the principal owed by about 36,000 borrowers as of Nov. 30.
Altogether the number of permanently modified mortgages stands around 910,000 according to MarketWatch, which says that number is up from roughly 880,000 as of October.
However, MarketWatch reiterates that this is far short of the original goal.
Dean Baker, economist and co-director of the Center for Economic and Policy Research, says these figures reflect the program's low goals. He told the Huffington Post, “this program in its design, is set up to help a very small portion of people.”
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