More than 26K new loan mods in February

By Reuters
Posted April 1 at 2:02 p.m.

About 26,147 struggling borrowers received new loan terms as part of President Barack Obama’s much-maligned foreclosure prevention program, the Treasury Department said Friday.

That’s about 2,000 fewer than the number of borrowers who negotiated lower monthly payments in January and brings the total number of borrowers active in the Home Affordable Modification Program to about 560,000, Treasury said.

More than 820,000 borrowers have dropped out of the program since its inception, or more than half of all modifications started.

The program has been widely viewed as ineffective and the House of Representatives earlier this week approved legislation to kill it.

The program, which offers incentives for lenders to modify loans, was launched to great fanfare in the spring of 2009. The Obama administration hoped it would permanently lower mortgage payments for 3 million to 4 million homeowners.

The move to kill the program is seen as an effort by Republicans, who last seized control of the House in November’s elections with an anti-bailout, anti-spending message, to score points with their political base.

Democrats argue the program should be fixed, not killed, and the White House has threatened to veto the measure in the unlikely event it clears the Senate.

About $30 billion has been set aside for the program from the government’s $700 billion financial rescue fund, but only about $1 billion of that has been spent.


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