Loan-modification dropouts rise. It is just not working.

I read this story this morning and thought how much it sounds like what struggling homeowners are telling me.  The sellers of my next short sale condo deal on Camelia in Lake Forest was caught up in the middle of this so called “assistance” prior to meeting me.  After months of frustration with the HAMP application process, they were given at $76 reduction in their mortgage.  This would certainly not help them keep their home that was now worth less than 1/2 of what they paid for it in 2006.  A month after communicating with me and doing their due dilligance, we are getting ready for their Grand Opening Open House on June 12th.  Look at the post I submitted last week. This incredible view home will sell at the open house, but is buyable right now for about $200,000 subject to interior inspection when the owners return from vacation in June.

The number of homeowners dropping out of the Obama administration’s main mortgage assistance plan is growing, and is now almost equal to the number who have received permanent relief.

The Treasury Department’s report Monday was the latest evidence of problems in the administration’s $75 billion program. While officials insist the program is helping the housing market turn around, critics say it is merely delaying an inevitable surge in foreclosures.

More than 299,000 homeowners had received permanent loan modifications as of last month, Treasury said. That’s about 25 percent of the 1.2 million who started the program since its March 2009 launch. They are paying, on average, $516 less each month.

However, the number of people who started the process but failed to get their mortgages permanently modified rose dramatically in April.  To read more about this story click on:

http://www.pe.com/business/local/stories/PE_Biz_D_mortgage18.13b5509b.html

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