The Obama administration's mortgage relief plan has helped only about 16 percent of borrowers who signed up since its launch last year, while hundreds of thousands of homeowners remain in limbo.
The Treasury Department says that as of last month, about 170,000 homeowners had completed the application process and had their loan payments reduced permanently. That compares with nearly 1.1 million homeowners who have enrolled since the plan started.
The program is designed to lower borrowers' monthly payments by reducing mortgage rates to as low as 2 percent for five years and extending loan terms to as long as 40 years. To complete the process, homeowners need to make three payments and provide proof of their income, plus a letter documenting their financial hardship.
About 90,000 homeowners have dropped out so far.
Homeowners in two California metro areas — Los Angeles and Riverside — have received the most help, with a combined 18,000 homeowners receiving permanent modifications.
But only 3,900 borrowers in Las Vegas had completed the program, a dismal showing in a city hard-hit by the foreclosure crisis.
Many analysts have been warning for months that the majority of borrowers will not complete the process because they are found to be ineligible during the trial phase. Housing counselors complain that many homeowners are waiting many months for a decision.
Meg Reilly, a Treasury Department spokeswoman, said lenders are double-checking calculations on denied applications, and that has led to delays.
Nevertheless, dissatisfaction with the program is widespread. There have been behind-the-scenes talks in the nation's capital about how to get it back on track.
The best solution, many analysts say, is an effort to reduce the outstanding balance for borrowers who owe far more on their homes than the properties are worth.
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