Released: May 18, 2010

Spike in homeowners losing mortgage aid

Source: Renae Merle, Washington Post (Free Registration)

Homeowners taking advantage of mortgage aid under a federal foreclosure-prevention plan are being dropped from the program at an increasing rate, potentially forcing more borrowers out of their homes as the program struggles to make an impact, according to Treasury data released Monday.

The program, known as Making Home Affordable, pays lenders to lower the mortgage payments of distressed borrowers, but it has struggled to have a significant effect on the country’s foreclosure crisis. Now it is increasingly losing borrowers who didn’t submit enough documentation to prove they qualified for the help or who fell behind on their new lower mortgage payments.

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