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Released: June 22, 2010

More dropouts in mortgage relief program

Source: Renae Merle, Washington Post (Free Registration)

The Obama administration’s marquee foreclosure-prevention initiative continues to struggle, as government data released Monday show that fewer homeowners are enrolling in the program and more are losing their federal mortgage aid.

Lenders enrolled homeowners into the mortgage relief effort, known as Making Home Affordable, at a slower pace last month after federal officials tightened the qualification process. Since the program’s launch last year, about 340,000 homeowners have received a permanent loan modification that lowers their mortgage payment for five years.

But a growing number of borrowers are failing to move from the program’s initial stage into a permanent loan modification. Lenders have said that many homeowners are failing to make the reduced loan payments and others have not been able to prove they qualify for mortgage assistance.

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