Mortgage Loan Compliance | Home Affordable Program Fallout

A Treasury Department report issued today said that approximately 630,000 people who had tried to get their monthly mortgage payments lowered through the effort have been cut loose through July। That means nearly half of the homeowners who enrolled in the Obama administration's flagship mortgage-relief program have fallen out according to statistics. In total about 48 % of the 1.3 million homeowners who had enrolled since March 2009. That is up from more than 40 percent through June.

Many homeowners have complained that program is a bureaucratic nightmare। They say banks often lose their documents and then claim borrowers did not send back the necessary paperwork repeatedly.

The banking industry said borrowers weren't sending back their paperwork। They also have accused the Obama administration of initially pressuring them to sign up borrowers without insisting first on proof of their income. When banks later moved to collect the information, many troubled homeowners were disqualified or dropped out.

The Obama plan was designed to help people in financial trouble by lowering their monthly mortgage payments। Homeowners who qualify can receive an interest rate as low as 2 percent for five years and a longer repayment period.

Approximately 421,804, or 32.3 percent of those who started the program, have received permanent loan modifications and are making their payments on time.
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