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Government aid programs face obstacles, but continue to help some homeowners
Although many of the federal initiatives to provide mortgage modifications and foreclosure prevention aid have been deemed "ineffective" by some lawmakers, recent reports show that the programs have gained some success.According to a report released by the Department of the Treasury, the Home Affordable Modification Program has been instrumental in helping more than 37,000 Americans secure permanent modifications during the month of July. Most homeowners see their mortgage loan payments decline by an average 36 percent after a permanent modification.
"HAMP, which represents just one, targeted piece of the Administration's larger efforts on housing, has so far offered more than a million and half responsible homeowners the chance to modify their mortgages," Financial Stability Treasury Assistant Secretary Herb Allison said.
The government group also said that more than 4.2 million Americans have benefitted from counseling services with professionals approved by the Department of Housing and Urban Development. The HUD-approved counselors have helped consumers understand and explore their options relating to credit cards, personal loans, auto loans and mortgage payments.
Many Americans have turned to loan modifications in recent months in hopes of reducing mortgage payments and staving off foreclosure. However, income limitations and credit score requirements have made a large number of applicants ineligible for aid.
