More Buyers Taking Advantage of Federal Modification Programs

After a slow start, President Obama's Mortgage Relief plan appears to be having a larger effect. According to a government report released yesterday, one in five eligible homeowners are taking advantage of the program. More than 650,000 borrowers have signed up for five month trials under the "Making Home Affordable" Program. To complete the modifications, the borrowers must fill out a stack of paperwork and prove that they can make payments on time.

The program is having a greater effect in some parts of the country than in others. Arizona, Nevada, and California, three states hit hard in the housing crisis, have participation rates of 22, 18, and 19% of eligible homeowners, respectively. To be eligible, homeowners must be two payments behind or in foreclosure at the end of last month. In Florida however, only 12% of eligible homeowners were participating in the program.

It is good to see the improvements in the execution of the "Making Home Affordable" Program. It is a program that has the potential to help a lot of people, but was not doing so. With trial modifications offered to 29% of eligible homeowners, a significant improvement from the 15% trial modifications had been offered to at the end of July, it looks like the program is making headway. While it may not mean that the government will meet its goal of 3-4 million loan modifications within the next three years, it is a promising start. The homeowners do have to be able to make their payments however and the eligibility requirements still leave out many affected by the crisis.